# Compilation of a City-Level & Four-Digit Industry Code MRIO Table Based on Firm-Level Data
## 2 Background of MRIO-Compilation in China  
Research on IO analysis methods in China began in the late 1950s. In 1974, China issued the first input-output table at the national level, the physical input-output table of 61 products in China, in 1973. Since 1987, China has adjusted its previous practice of using the material product balance system (MPS) to compile the IO table for each year. Based on the System of National Accounts (SNA), the NBS in China has begun compiling the national IO table every 2 nd and 7 th year. This is similar to many countries whose benchmark IO tables are compiled every five years [19]. The time interval of 5 years might lead to the relative lag in the publication of the IO table and to the difficulty in the real-time analysis. To mitigate such problems, the NBS compiles the IO extension table every five years in the year, ending with 0 or 5. The extension table is based on the national IO table, survey data and other professional statistical data. In 1987, the NBS issued a national value-based input-output table of 117 industry sectors. In 2005, the State Information Center of China developed an inter-regional input-output table covering 30 departments in 8 regions of China in 1997. First, it adjusts the input-output table of each province or municipality according to a unified standard. Then, according to the similarity of industrial structures, economic development levels, and geographical distributions, all provinces or municipalities are categorized into eight major regions. In addition, in combination with relevant statistical data, a typical survey method is applied to collect basic data about the flow of commodities between provinces. Finally, the inter-regional IO table is compiled based on the Chenery-Moses input-output model [20]. Since 1997, China's economy has developed rapidly, and inter-regional trade has been further strengthened. As a result, based on the regional input-output table in 1997, [PERSON] et al. [21] proposed a new estimation model to compile the 2002 and 2007 MRIO tables. Each table involves 31 provinces and municipalities across the country, categorized into eight regions according to their locations. Their work estimates the inter-regional trade coefficient based on the maximum entropy model and the gravity model. It also revises the inter-regional transaction matrix by using the inflows and outflows provincial basic data from the 2007 national IO table. The 2002 and 2007 MRIO tables adopt the sector classification method by the NBS (GB/T 4754-2011) and merge the service sector, thus having a total of 29 sectors. It is basically comparable to the sectoral classification of the above-mentioned 1997 MRIO table with 30 sectors. The regional division of 8 regions is the same as the 1997 MRIO table. It must be pointed out that various MRIO tables can be developed with different regional combinations because the compilation work of the 2002 and 2007 MRIO models is based on the individual provinces. Furthermore, [PERSON] et al. [16; 17] compiled an MRIO table for 30 provinces and 30 economic sectors for 2007 and 2010. Their compilation is based on the province-level input-output tables of China's 30 provinces or municipalities, except for Tibet. Through an in-depth analysis of the influence from the same industry and spatial dependence theory, this research reconstructs the gravity model of inter-regional economic connections. In addition, it uses the statistical data of inter-regional commodity flows and combines the matrix-balanced RAS method, thus systematically realizing the simulation of inter-regional industrial trade. This table is an improvement over the previous MRIO table in that it describes the input-output relationship between 30 sectors in China's 30 provinces, rather than being limited to 8 large regions. In 2018, [PERSON] et al. [22] compiled an inter-regional I-O table for 2012, extending to 31 provinces and 42 sectors in China.