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2 ESTIMATION OF THE SOCIAL AND ECONOMIC IMPACT OF THE LIBERALIZACIÓN OF THE TELECOMUNICATION SECTOR IN SPAIN Nelson Álvarez Vázquez. National University of Education to Distance. Spain Ángel Muñoz Alamillos. National University of Education to Distance. Spain Francisco Parra Rodríguez. National University of Education to Distance. Spain Paper Presented at the ITS Conference. Buenos Aires, July, 2000.

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ESTIMATION OF THE SOCIAL AND ECONOMIC IMPACT OF THE LIBERALIZACIÓN OF THE TELECOMUNICATION SECTOR IN

SPAIN

Nelson Álvarez Vázquez. National University of Education to Distance. Spain

Ángel Muñoz Alamillos. National University of Education to Distance. Spain

Francisco Parra Rodríguez. National University of Education to Distance. Spain

Paper Presented at the ITS Conference.

Buenos Aires, July, 2000.

3

SUMMARY.

I) Introduction.

II) The Input Output Table.

III) The Criticism of the Assumptions of the Input Output Model.

IV) The Spanish 1995 Input Output Table.

V) The Deregulation of the Spanish Telecommunications Sector.

VI) Simulation Results.

VII) Concluding Remarks. Introduction.

The acceptance of the significance of the telecommunications is beyond any doubt. According to that, we can say that it is been is analysed from different points of view not only in the professional field but also in the academic one.

The paper deals with a quantitative approach, but it should be prevented from the risk of misunderstanding the importance of the qualitative statements. We believe that the lemma should no measurement without theory, but theory measurement, better the theory and measurement.

The quantitative conclusions obtained from application of the Input

Output instrument, only would be acceptable if foundated upon a theory. We make a fundamental difference between theory and hypothesis. By theory, we mean a simple statement relating an endogenous variable (effect) and one exogenous (cause). A theory is a simple statement. By hypothesis we understand a relationship between an endogenous variable and more than one exogenous. So it is a complex statement.

The link between theory and hypothesis can be placed on the ceteris

paribus condition. For theory, it is assumed that the other things (other causes) are equal, and the problem is how to instrument it in quantitative terms. For the hypothesis, the other causes would be changing in parallel to the main cause.

4

The best paradigm is the demand theory as it was formulated by Cournot and Marshall. We could proceed by considering that quantities (effect ) are determined by prices (cause). The other potential causes like income would be included in the ceteris paribus condition.

Alternatively, a demand hypothesis would explain the variation

(movement) in quantities by price and income. Income would be changing in parallel to price.

Even many people believe that a more complex relationship should

be preferable to a simple one, such a conclusion is far from be immediate. Then, and conditioned to that, comes into sight the problem of

measurement. Now it makes sense to mention two contradictory methodological postures. On the one hand, K. Popper is adopting the view that only testability (measurement) matter. On the other, L. Robbins is supporting the argument that testing in Economics is irrelevant to the truth of economic theories.

Even it is not our aim at establishing a synthesis between those

apparently contradictory views, we would agree as a matter of fact in that testing has been irrelevant for economic science, and hence, for its application to the academic and professional fields. We can not afford a list of the economic hypotheses and theories, on the one hand, accepted, on the other rejected.

The Input Output analysis is based on a very simple theory, a

production function with a single productive input. We are assuming in the paper that the foundations of Input Output analysis are beyond of question, even we could proceed at the end of the paper presentation to the discussion. By assuming its validity, we will present the quantitative conclusions.

Previously to that, we believe that it would be highly convenient to

summarise the main features of the Input Output approach, whose starting point is the Input Output Table.

II) The Input Output Table.

5

Because we have considered that for understanding the essential characteristics, the so enormous amount of data disposable and to be used in the paper as would be an obstacle, it is presented in the final appendix.

The Input-Output table as it is represented below, is presenting the

information related to the production account of an economic system (may be a country, a region or even an specific sector like energy in Spain. The production of this unity, is splitted in many sectors. The productive sectors (for example, agriculture) are represented by the rows or columns (1 to n). By rows, there are the primary outputs, by columns, the primary inputs. Then there are the final sectors from d1 to dn like consumption or imports.

PROCUTIVE SECTORS FINAL

DEMAND 1 2 j n d1 … dm X 1 2 I Xij

P

RO

DU

CIV

E S

EC

TO

RS

PR

OD

UC

TIV

E S

ECTO

RS

eOS

N

to

OU

TPU

T T

OTA

L

A B IN

PU

TS

PR

IMA

RY

IN

PU

TS

X TOTAL INPUT Table 1: Input Output Table. Reading by rows, the cells are indicating sales of the sector of the

row to the sectors of the columns (Outputs), and consequently, revenues. Reading by columns, it indicates purchases of the sector to the other sectors (Inputs). It should be noticed that sales and purchases are expresensed in monetary units, no physically. Thus the information contained in the table is representing in quantitative terms the relation between the different sectors of an economic system. One of these is the communications sector

6

The quantity designed by Xij, is the measurement of sales of the sector i to the sector j, or purchases of the sector j to the sector i.

The Final Demand sectors are reflecting by rows the sales of the no productive sectors. They are aggregated in general in four large sectors: consume of families, consumption by other agent, Gross Investment in addition to stocks, and Exports. The addition of the total sales from the productive and final sectors, is called the total Output (X).

By columns the meaning of the addition is the total Input. This includes the Intermediate Consumption, the Gross Added Value, and the imports. The total Input is by definition equal to the total Output, a requirement only acceptable if the model is static.

The concepts normally included in the Gross Added Value are

indirect taxes, Subsidies, wages and salaries, consumption of fixed capital in the productive process and the difference between revenues and expenditures.

By introducing a very simple production function, we obtain the Input Output model. Historically, it was formulated by W. Leontief, a Russian economist who arrived to Harvard in the 1930s, as well as Chamberlain and Schumpeter. Even the doctrine of the monopolistic competition developed by Chamberlain is generally applied in the telecommunications market, it should be remembered his major assumption, namely the heterogeneity of the product.

Relate to the telecommunications sector, the product is traffic, and

so, it is homogeneous. The Input Output analysis is based on the assumption each sector is producing a single and homogeneous sector.

The production function may be expressed for any sector, by xij = aij X j (1) where the purchases of the sector to the other sector are a linear

function of the Output. The so called technical coefficient, aij, is interpreted as an structural parameter represent the proportion of the production of the sector i to obtain the total of the product of the sector j.

7

That is to say: the technical coefficient is given by

,j

ij

ijX

xa =

(2) Such a coefficient is the most important element in the Input Output

analysis. By extending the indexes I, j from 1 to n, we obtain the matrix of technical coefficients, an square table n x n, that is,

a11X1+ a12X2+ ....+ a1nXn + D1=X1

a21X1+ a22X2+ ....+ a2nXn + D2=X2 (3)

an1X1+ an2X2+ ....+ annXn + Dn=Xn

which let us to express in a more useful way for the analysis, namely,

the equation system given by

(1-a11) X1 - a12X2 - ....- a1nXn = D1

-a21 X1 +(1- a22 )X2 - ....- a2nXn = D2 (4)

-an1 X1 – an2X2 - ....+(1-ann )Xn = Dn

and synthetically, by the equation

[I – A]X= D (5)

where I is one unitary matrix, n x n. A it is the matrix of technical coefficients, n x n X is a vector, n x 1 D is a vector, n x 1

This is the theoretical model. We can get the political model used in

the simulation after a rather simple transformation:

8

X= [I – A]-1D (6)

For any given targets established for the elements of vector D, the model (6) let us to know which is the necessary variation of the productive sectors represented by X.

It can be explained by considering any equation of the system (6),

where the elements ijB are representing the elements of the inverse matrix,

given by, Xi = Bi1D1 + Bi2D2 + .... + BijDj + .... + BinDn (7) If it is introduced a variation in the Final Demand represented by , it will cause a variation in the total output of sector i represented by iX∆ It may be represented by the equation (8):

∆Xi = Bi1∆D1 + Bi2∆D2 + .... + Bij∆Dj + .... + Bin∆Dn (8)

For a better understanding of the meaning of the variation, we may suppose that all 0....21 =∆==∆=∆ nDDD , except for 1=∆ jD . Then it would

result that ∆Xi = Bij (9)

It means that any element ijB of the inverse matrix [ ] 1−− AI , is

measuring the variation of the total output of the sector i . The element Bij

is representing variation of the output of the sector I, given a unitary variation for the sector j of the Final Demand, other things being equal.

Analogously, if in the previous equation is supposed that, 1.......21 =∆==∆==∆=∆ nj DDDD , then would result:

It may be interpreted that the sum of the elements of the row i of the inverse matrix [I – A]-1 is indicating the variation for the total output of the sector i for supplying an additional unit for all the sectors of the Final Demand.

∑=

=∆n

j

iji BX1

9

As it was stated before, it means the political implementation of the theoretical Input Output model.

III) The Criticism of the Assumptions of the Input Output Model.

The major criticism concerns to the simplicity of the production

function as well as its linearity. We believe that the matter is depending on the maintained hypothesis. If it is maintained the assumption that a production function should include as many variables as possible, the criticism should be right.

Our methodological point is that all the scientifical statement should

be of causal nature. But the only way for imputing and then measuring the variation of one effect to a single cause is to represent causality under the clause of ceteris paribus. An argument favouring this view is the well known problem of multicollinearity.

In summary, the alternative is we can formulate a model representing

a simple relationship between an endogenous and an exogenous variable, given the assumption of other things being equal, or not the contrary, if it is possible to represent and to measure a multiple relationship, involving and endogenous variable and several exogenous. In that case, it means in the place of the assumption of ceteris paribus, the assumption of other things being changing.

The inclusiveness of the criticism should be due to the fact that it is

based on the contradictory maintained hypothesis. It is raised a second criticism concerning to the assumption of the

constancy of technical coefficients. Time and again the objection is valid under the maintained hypothesis of variability. We would like to point out that in others sciences the constancy is assumed as a logical assumption. For example, hardly we could conceive as variable the velocity of the sound or of the light in physics.

In econometrics, under the influence of probability, the maintained,

never tested hypothesis of variability, would seem to be of variability. We believe that such a hypothesis is solving nothing, and creating new problems. Because if the parameters would be changing, we would need to know the law of variation.

10

We think that the true problem of the Input Output analysis would lie

on the measurement of technical coefficients, by using a single observation, for instance, the 1995 year.

We believe that nobody could provide the empirical evidence

necessary to solve the controversy. To conclude the methodological issue, we assume the Input Output foundations as they are. As a matter of facts, this technique has been used since the early days in Spain. The first Spanish Input Output table was published in 1954, and since that time, there were published many others, not only at a national level, but also local tables for different regions and sectors.

Now we have to make additional comments on the Spanish 1995

Input Output Table.

IV ) The Spanish 1995 Input Output Table.

The high cost involved in the elaboration of an Input-Output Table,

imply that it has to be performed usually every 5 years. The results used in the paper should be considered as preliminary ones, yet officially unpublished.

We have to observe that we have no an specific sector for

telecommunications, but only for the communications sector. So telecommunications is a part, even according to the evidences further presented, it means the major component of the sector. In addition, the activities included in the telecommunications sector, are relatively ample, in the sense that it should be imprecise to assume that the telecommunications sector is producing a single and unique product or service. All kind of communication activities are included like telephone, telegraph, telex, the radio and television transmission, service 903, audiotex, as well as maintenance of networks. In fact it is not unusual to speak of added value products.

Any way, if we want to use the Input Output Analysis, the only alternative would be to elaborate a new table for the telecommunications sector, a conclusion which could be a corollary of this paper.

11

Consequently, we proceeded to split the communications sector into two major parts: the Post Office services and telecommunications. To achieve this task, it was used the information from a sampling survey made by the Spanish National Institute of Statistics for 1995.

We considered that the huge amount of data disposable and used in

the elaboration of the paper as those contained in the Table, would let us a better understanding of the essence of the argument if they were presented in the appendix. So we did that.

Any way, if we want to use the Input Output Analysis, the only

alternative would be to elaborate a new table for the telecommunications sector, a conclusion which could be a corollary of this paper.

In short, we can explain how we dealt with data. The model by using

the of information the Input - Output Spanish Table (1995), we prepared a brief summary. It is based on the methodology of the European System of Accounts (SEC-95) of the European Union, itself structure in two blocks.

A summary of the results of this Survey are presented at Table 2 (for revenues) and table 3 (for expenditures).

As an example, you may see by reading the last row of the Table 1, that, in 1995, the revenues of the communications sector exceed by 2 trillion of pesetas. The revenue for the telecommunications sector amount up to 1.614.962.215 pesetas.

Table 2. Revenues (Sales) for the Post Office and

Telecommunications sector. Thousands of pesetas (1995)

Postal services

Telecommunications

Total Sector %

Revenues from Post Office

294.697.493 48.735 294.746.228 14,4%

Revenues from Telecommunications

12.917.364 1.397.716.042 1.410.633.406 69,0%

Other revenues 77.894.434 214.702.867 292.597.301 14,3% Total revenues 385.509.291 1.612.467.644 1.997.976.935 97,7% Subsidies 44.476.099 2.494.570 46.970.669 2,3%

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Total revenues and subsidies

429.985.390 1.614.962.214 2.044.947.604 100,0%

Source: Sampling Survey of Post Office and Telecommunications.

1995. INE

Similarly, reading the last column for table 3, it may be observed that the expenditures for the telecommunications sector, have a high content of imports. Namely, the 36% are purchases to other countries. The other part is distributed among purchases and expenditures for services in Spain (17,3%), financial expenditures (14,3%) and expenditures for labour (32,3%).

13

Table 3 Expenditures (Purchases) for the Post Office and

Telecommunications Sector. Thousand of pesetas. 1995

1995 % Post Office Services

Telecommunications

Total P-O Telecommunications

Costs 79.201.250 89.605.394 168.806

.644

20,5

%

6,3%

Rent 8.505.479 17.402.651 25.908.

130

2,2

%

1,2%

Repairs and maintenance

36.448 545.389 581.837 0,0

%

0,0%

Agents 2.823.765 1.154.974 3.978.7

39

0,7

%

0,1%

Transport 21.522.567 1.834.805 23.357.

372

5,6

%

0,1%

Insurance 1.259.886 2.720.145 3.980.0

31

0,3

%

0,2%

Publicity 3.193.837 11.561.423 14.755.

260

0,8

%

0,8%

Supplies 32.859.770 21.248.869 54.108.

639

8,5

%

1,5%

Taxes linked to the production

1.178.031 27.522.309 28.700.

340

0,3

%

1,9%

Other operating expenses

24.003.539 72.713.029 96.716.

568

6,2

%

5,1%

Total operating

expenses

174.584.57

2

246.308.988 420.893

.560

45,2

%

17,3%

Interest

expenses

3.712.228 203.983.286 207.695

.514

1,0

%

14,3%

Employee cost 204.587.18

5

460.440.923 665.028

.108

53,0

%

32,3%

Import 3.108.991 513.064.257 516.173

.248

0,8

%

36,0%

Total 385.992.97

6

1.423.797.454 100,

0%

100,0%

Source: Sampling Survey of Services and Telecommunications 1995. INE

14

At table 4, it may be observed that the contribution from the Telecommunications to the GDP would be the 2.3 % as well as wages and salaries would signify the 1,4% .

Table 4. Relative Contribution from the Telecommunications Sector to

the GDP. Millions of pesetas. 1995

Telecommunications

GDP

Percentage

Gross Added Value (Basic prices

1.518.476 67.139.506

2,3%

Production to basic prices 1.741.197 133.284.917

1,3%

Intermediate consumption 222.721 66.145.411

0,3%

Wages and salaries 497.908 36.354.286

1,4%

Other subsidies less taxes linked to production and import

21.011 625.055 3,4%

Gross margin 999.558 30.160.165

3,3%

Employment Total 75.141 13.733.7

23 0,5%

Dependent employment 75.039 11.089.216

0,7%

Time complete job Total 74.112 13.025.0

68 0,6%

Dependent employment 74.135 10.563.845

0,7%

Fountain: Own elaboration as of the data of the Table Input-Output of Spain of 1995.

15

At table 4, the sales of the sector are distributed among the other sectors. The productive and demand signify the 56,53%, and the domestic consumption, the 39,02% . Exports would be around the 4,45%.

Table 5. Sales of the Telecommunications to other sectors. Millions of

pesetas. 1995.

Millions of pesetas. % Agriculture 8.459 0,5% Energy, Mining and Water 20.419 1,3% Industry 212.381 13,4% Building 38.459 2,4% Public administrations and private non-profit institutions

172.864 10,9%

Services 443.915 28,0% Intermediate demand 896.497 56,5%

Final consumption of household 618.889 39,0% Export 70.598 4,5% Final demand 689.487 43,5%

Total 1.585.984 100,0%

Source: Based on the Input-Output Table. 1995.

16

Table 5

Aggregated symmetrical table for intermediate consumption (6 sectors, in Millions of pesetas. 1995. Agrarian

sector Industry Constructio

n Services destined for sale except telecommunications

Telecommunications

Public administration and other services

Total interiors consumption intermediate

1 2 3 4 5 Total interiors consumption intermediate

Agrarian sector 1 432.603 2.921.074 43.691 285.861 605 25.430 3.709.264 Industry 2 1.278.852 14.083.06

6 3.236.313 5.060.869 61.460 991.801 24.712.36

1 Construction 3 30.862 248.344 2.254.157 1.483.944 4.310 217.197 4.238.814 Services destined for sale except telecommunications

4 424.779 5.976.574 1.910.641 11.117.660 102.147 1.237.629 20.769.431

Telecommunications 5 6.843 91.271 27.443 215.034 3.175 12.232 355.998 Public administration and other services

6 16.974 117.867 26.356 143.583 3.199 85.185 393.165

Total interiors consumption intermediate

2.190.913 23.438.196

7.498.601 18.306.952 174.896 2.569.475 54.179.033

Source: Based on the Table Input-Output Table 1995.

17

V) The Deregulation of the Spanish Telecommunications Sector.

In a very short time, it is well known that the telecommunications

Spanish market changed from monopoly to an oligopolistic framework. Even it would reasonable to talk about monopolistic competition, we believe that the service is homogeneous, namely the traffic, so it would more adequate to talk about oligopoly.

And that means that economic equilibrium is indeterminate, so it is

required legal intervention. But in any case, the equilibrium indetermination, is a common conclusion.

Even it could be said that deregulation has had as a consequence, a

reduction of traffic prices, here we have an example of the insurmountable difficulties generated in using a multiple causality relationship. It should be remembered that at the same time it became a significant technological progress. That means that for a given price reduction, it is no immediate to establish what part of the variation should be attributed to each one.

In other words, it would a highly convenient research to afford

empirical evidences about that. The issues to deal with, would be to precise, if assuming a given reduction of prices, which part of the increase of demand could take place along the curve of demand itself and which part would be due to a displacement of the curve. It could be tried to solve the problem when we have historical time series. We would need a sufficient number of observations for every year, but we have for example, only one couple for prices and quantities.

VI. Simulation Results

By assuming hypothetically, a yearly increase in sales around the

10% annual, what would indicate the model for the following years after 1995. The results are summarised at Table 7.

By reading the last row, it indicates that if sales were increased by

the 10%, it would imply a total increase around 316.571 million (pesetas). In addition, such an hypothetical increase would signify a new jobs

creation around 29.883 employees (what means the 0,22% of the national

18

employment). The wages and salaries would increase would by approximately 114.947 (millions of pesetas), that is, the 3,2%.

Table 7 Simulation Results.

Employm

ent

Wages and

Salaries

Observed

Productio

n

Gross

Added

Value

Added

(Basic

Prices)

Families

Consumpti

on

A) VALUES

millions ptas.

millions ptas.

millions ptas.

millions ptas.

Initial

Conditions

13.733.723

36.354.286 133.284.917

70.273.386 41.759.261

Direct Effects 13.285 78.537 272.424 229.564 247.556 Indirect

Effects

1.241 3.677 14.601 7.354 0

Rents Effects 15.356 32.733 145.579 79.653 7.184 Total Effects 29.883 114.947 432.604 316.571 254.740

B) PERCENTAGES

Direct Effects 0,10% 0,22% 0,20% 0,33% 0,59% Indirect

Effects 0,01% 0,01% 0,01% 0,01% 0,00%

Rents Effects 0,11% 0,09% 0,11% 0,11% 0,02% Total Effects 0,22% 0,32% 0,32% 0,45% 0,61%

As a consequence, the GDP should be increased by 432.604 million

of pesetas, what means the 0,32%. Finally, the consumer expenditures likely would reach the amount of 254.740 million of pesetas (the 0,61%).

In short, the most salient feature of the simulation would be the so

called direct effects on income and employment. The relatively low contribution from the indirect effects would be due to the significance of the imports for the telecommunications sector. That is, part of the effect of the increase on sales would be influencing the income and employment of

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the rest of the world, particularly, the manufacturing firms of equipment and technology.

Our point is that a political derived form the analysis the Spanish

specific contribution, would be producing telecommunication services, instead of creating new technology. This is our interpretation of the percentage around 36% of purchases to the rest of the world.

In desegregated terms, the empirical evidences are presented at

Tables 7 and 8. The first one, is measuring the effects upon the production and the employment for some specific sectors. The major contribution form the telecommunications sector is on production and employment.

20

Table 8. Effects upon production (Millions of pesetas). of 1995 SECTORS Direct

effects Induced effects

Effect rents

Total effects

Telecommunications 247.847 344 3.155 251.346 Hotels and catering 681 262 19.281 20.223 House and estate agents 1.592 486 12.604 14.682 Retail distribution and repairs (except retail distribution of motor vehicles and cycles and retail distribution of motor fuels and lubricating oils and Repair of motor vehicles and bicycles).

546 310 9.992 10.849

Other business services 4.829 1.460 3.824 10.114 Manufacture of other food products 42 182 8.020 8.243 Agriculture, cattle raising and hunt 84 240 7.624 7.948 Wholesale distribution and Agents 157 285 6.737 7.180 Building and civil engineering 613 868 4.286 5.766 Generation and distribution of electric power 1.223 717 3.625 5.564 Retail distribution of motor vehicles and cycles, retail distribution of motor fuels and lubricating oils and repair of motor vehicles and bicycles

982 369 4.060 5.411

Conveyance via pipeline, and land transport not elsewhere specified

488 842 4.023 5.354

Recreational services and other cultural privates services

810 374 4.101 5.285

Slaughtering, preparing and preserving of meat (except the butchers’ trade)

14 57 4.387 4.458

Printing and allied industries 1.215 781 2.116 4.112 Chemical industry 558 533 2.733 3.823 Medical and other health privates services; veterinary services

353 71 3.252 3.676

Brewing and malting 12 114 2.836 2.961 Manufacture and assembly of motor vehicles (including road tractors) and manufacture of motor vehicle engines

319 336 2.265 2.920

Manufacture of pulp, paper and board 436 717 1.443 2.596 Supporting services to transport and Travel agents

79 365 2.015 2.459

Postal services 1.821 146 466 2.433 Coke ovens, Mineral oil refining, and nuclear fuels industry

313 261 1.852 2.426

Insurance, except for compulsory social insurance

451 132 1.722 2.305

Manufacture of metal articles (except for mechanical, Electrical and instrument engineering and vehicles)

278 485 1.411 2.174

Rest 6.681 3.864 27.749 38.296 Total 272.424 14.601 145.579 432.604

21

Table 9. Effects upon employment (Million pesetas.)

Direct effects

Induced effects

Effect rents

Total effects

Telecommunications 10.696 15 136 10.847

Retail distribution and repairs (except retail distribution of motor vehicles and cycles and retail distribution of motor fuels and lubricating oils and Repair of motor vehicles and bicycles).

131 74 2.392 2.597

Hotels and catering 61 24 1.734 1.818 Agriculture, cattle raising and hunt 17 49 1.558 1.624 Other business services 686 207 543 1.437 Family 0 0 1.437 1.437 Wholesale distribution and Agents 18 33 779 830 Retail distribution of motor vehicles and cycles, retail distribution of motor fuels and lubricating oils and repair of motor vehicles and bicycles

141 53 584 778

Conveyance via pipeline, and land transport not elsewhere specified

64 110 526 700

Postal services 457 37 117 610 Building and civil engineering 56 80 394 531 Medical and other health private services; veterinary services

49 10 455 514

Recreational services and other cultural private services

78 36 394 508

Manufacture of other food products 2 10 428 440 Education Private 41 6 322 369 Personal services 2 6 329 337 Printing and allied industries 88 57 154 298 Clothing industry 20 8 256 283 Wooden furniture industries and Miscellaneous manufacturing industries

13 6 194 213

Manufacture of metal articles (except for mechanical, electrical and instrument engineering and vehicles)

25 44 128 197

Slaughtering, preparing and preserving of meat (except the butchers’ trade)

1 2 171 174

Medical and other health public services; veterinary services

4 1 164 169

Public services 81 20 62 164 Supporting services to transport and Travel agents 5 24 131 160 Textile Industry 6 13 125 144 Rest 543 316 1.843 2.704 Total 13.285 1.241 15.35

6 29.88

3

22

VIII) Concluding Remarks.

We would like to emphasise only tow major conclusions. Firstly, it

appears that the creation of employment would be in disagreement with the observed reduction of employment by Telefonica. Such a conclusion would be a mistake. It is possible to make some remarks. The employment could be shifted to another telecommunications operators, the observed employment of Telefonica, could be greater than that explained by its production function, and the reduction could be supported on political reasons.

The second implication would be that of considering the possibility of

changing the policy for the, sector, namely if it would be better to devote some of resources to the creation and selling of technology, given the relatively high level of the imports.

Any way, the simulation is only a preliminary approach, and as such,

open to the discussion. BIBLIOGRAFIA.

• Andrés, J.; Molinas, C. y Taguas, D. (1991): "Una función de consumo privado para la economía española" en La economía española. Una perspectiva macroeconómica. dirigido por Molinas,C, Sebastián, M y Zabalza, A. Antoni Bosch, editor.

• EUROSTAT(1996): Sistema Europeo de Cuentas. SEC 1995. Luxemburgo: Oficina de publicaciones Oficiales de las Comunidades Europeas.

• Herce, J. A. y Sosvilla-Rivero, S (1995) "HERMIN Spain". Economic Modeling. Vol. 12. Nº 3.

• Leontief, Wassily (1986): Input-otput economics. Oxford University Press. 2ª Ed.

• Miller, Roland E. y Blair, Peter (1985): Input-Output Análisis. Foundations and Extensions. Prentice-Hall.

• Muñoz, Angel (1997): Estimación del Impacto Económico de la Minería del carbón en la provincia de León. Acto de clausura del curso académico 1996-97. Facultad de Ciencias Económicas y Empresariales. Universidad de León.

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• Santos, Julian; Cortiñas, Pedro; Muñoz, Angel (1999): “La Medición de la incidencia de la sanidad pública en la economía mediante el análisis Input-Output” en Efectos económicos del gasto público en sanidad. PriceWaterhouse.