Evaluating Economic Contribution of Seafood Industries in Busan Using Hypothetical Extraction Method

Abstract

Seafood industries of Busan in South Korea have currently suffered a notable decline in both regional output and value-added unlike the production growth in the past. In this situation, this study tries to evaluate the economic contribution of Busan's seafood industries using the hypothetical extraction method (HEM), a well-established technique that has rarely been applied in fisheries contexts. Also, this study is the first attempt to utilize the theoretically rigorous HEM to quantify the economic contribution of seafood industries within the SAM framework, addressing the limitation of IO models that do not consider distributional effects. The results showed, among others, that Wholesale Trade and Transportation Services are key industries for fishery managers and policymakers to target, as fostering their growth could significantly enhance the economic contribution of the seafood industries due to their high direct and total linkages. Interestingly, this study also discovered that several unexpected industries, such as Real Estate & Leasing and Health & Social Services, play a critical role in boosting the economic contribution of the seafood industries when the seafood industries are hypothetically extracted, since the considerable income allocated to household and regional government from industry activities are distributed to those sectors again.