LCRs are not inefficient and stimulate growth
Irina Semykina 15, Candidate of sciences Institute of Economics and Industrial Engineering, “Opportunities and benefits of local content requirement policy: case of Eastern Siberian oil and gas industry,” European Regional Science Association. 08/28/15, https://www.econstor.eu/bitstream/10419/124560/1/ERSA2015_00021.pdf //nm
LCRs are able to involve local producers and labor in the implementation of oil and
gas projects, to create multiple (indirect) effects through the regional inter-industry linkages.
Development of equipment and services suppliers for oil and gas industry by ripple effects is
able to boost economic development and diversify regional economy. Thus, the results of the
calculations support the proposition that the LCR policy may be a kind of tool generating the
induced economy. Moreover the study shows a strong potential capacity for the regional
economy to maintain sustainable growth exploiting and properly balancing the levers of LCR
policy. Using the appropriate economic and mathematical tools it is possible to form special
guidelines for either local or national governments in order to avoid situations when
procurement expenditures may prop up inefficient industries instead of driving economic
development.