A social accounting matrix for prato: Interrelating the chinese migrant community and the provincial economy

Abstract

A social accounting matrix (SAM) is a descriptive and analytical tool that records the flows occurring between all of the actors of an economic system. SAMs represent the economic process, stressing its circularity in a flexible way. The disaggregation of the individual accounting blocks in a SAM make it possible to highlight particular interdependencies. Such interdependencies would remain hidden in traditional statements (two section accounts). We analyze the 2010 SAM estimated for Prato Province, distinguishing between the Chinese migrant community and the local community (that includes other migrant communities). This distinction allows us to quantify the contribution of the Chinese community to the entire provincial economy. We consider contributions such as the production of goods and services, the income generation, and the aggregate demand addressed to the system by the community itself. Using the estimated SAM as an impact modeling tool allows us to evaluate the economic effect of the integration policies of the Chinese community (additionally, in terms of overcoming local liabilities).