Estimating trade balance for a small region: Beira–Estrela, Portugal

This paper estimates the trade balance for a small region located in inland Portugal – Beira Estrela – geographically defined as the merge of 3 official NUT III regions – Beira Interior Norte, Serra da Estrela and Cova da Beira. This estimate disaggregates by 31 commodities and includes four essential parts: first, the international trade of goods and services; second, the interregional trade of the same commodities; third, the net balance between in-region consumption by foreigner non-residents and the international consumption by residents and finally the equivalent net balance for Portuguese tourists visiting Beira-Estrela and the consumption of out Beira-Estrela Portuguese residents. Interregional trade (not available in official statistics) is the residual between supply and demand of the different groups of commodities corresponding to the columns and rows of a regional Make and Use table we derive for Beira-Estrela. This regional matrix is the outcome of the application of a simplified non-survey method to the Portuguese (National Accounts provided) Make and Use table decomposition. Moreover we set a survey on lodging and restaurant users that allowed the detachment of the interregional tourist consumption flows from the remaining interregional trade. The aim of this estimate is to assess the relative importance of tourism in the Beira-Estrela regional trade balance. Furthermore, we argue in the paper that, unlike countries, regions do not benefit from trade surpluses and these surpluses are just the counterpart of the income drainage or capital outflows, which weaken the economic region basis.