Evaluating economic contribution of seafood industries in Busan using hypothetical extraction method

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 a rare 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 recognize, as the economic contribution of the seafood industries to these sectors account for a large share of the regional economy due to their strong direct and total linkages. Interestingly, this study also discovered that the seafood industries make substantial contributions to several unexpected industries compared to their direct contributions, such as Real Estate & Leasing and Health & Social Services, due to accounting for the distributional effects captured in the SAM model.