An empirical study of the economic impact of the MICE industry in China using interregional input-output models (IRIO).

Abstract

The MICE industry is generally considered to be one of the key driving industries for a region's economic development. In the past few decades, China has seen rapid growth in its MICE industry, with milestone events like the 2008 Beijing Olympic Games and the 2010 World Expo. The industry is set to see further growth in China in the future. Beijing, for instance, have estimated a revenue of 30 billion Yuan and a YOY growth rate of over 15%. Around the globe, the MICE industry is considered to be one of the fastest growing industries, especially in the Asia- Pacific region. In the last 20 years, the assessment of events' impact on an economy has been central to event economy studies, and the MICE industry is one of the main components of the event economy. The economic impact of the MICE industry can be studied analog to the studies of the event economy. The approach to studying an event's impact on the economy has evolved over the past years from a rough direct calculation using a tourism index, to input- output models, computable general equilibrium models, and regression analyses. Interregional input- output models(IRIO) can overcome the limitations of the simple I-O model, which is restricted to dealing with local production and demand within one region. They are a more appropriate tool for reflecting conditions across different areas and industries and are also able to explain the diversion and integrated effect of events. For these reasons, IRIOs are one of the most important tools for studying the impact of the MICE industry on an economy. In the past, numerous studies have been conducted to assess and evaluate the economic impact of events. Most of them, however, have concentrated on assessing the impact of sports events at the local or international level. In contrast, research on the economic impact of MICE activities is relatively limited. It requires consideration of all related industries and regions with minimal divergence from reality. This is the precise aim of this study. This study uses an IRIO to deduce and calculate influence coefficients of MICE at both local and interregional levels, focusing on effects across 12 industries and 30 provinces. It uses the 104 th Canton Fair as an example to analyze the indirect impact on the local economy. The results showed that the indirect economic impact of the Canton Fair amounted to 16.243 billion Yuan, of which 35.09% fell in Guangdong province. The proportion of direct to indirect impact from the event was 1:2.94. Five industries- wholesale and retail trade services; electricity, steam and hot water production and supply; paper, printing and stationary and toy products; accommodation and food services; telecommunication and computer services-accounted for 77% of the total impact of the event. This study reveals that MICE have a tremendous driving effect on various industries in most provinces in China. The regional impact demonstrates a difference between the eastern coastal area and the central and western areas. In addition, it concludes that further development is still to be expected in China's MICE industry in the future.