Relationships and Interdependencies of the Agri-Food Sector in a Regional Economy: Employing an Input-Output Model

Abstract

The agri-food sector has been stressed as an essential determinant for an economy, as its impacts contribute directly and indirectly to its growth in various ways; with its products, with its trade, both in outputs and inputs, and when the sector grows. The current work aims to capture the relationships and impacts of the agri-food sector in a regional economy through linkage analysis. Building upon the relationship marketing theory, this is achieved by utilizing an I/O model constructed through modifying the Generation of Regional Input-Output Tables (GRIT) regionalization technique and using the Flegg Location Quotient (FLQ). The relationships of the economic sectors resulting from the purchases and sales between them provide helpful information for the region’s economy. The results demonstrate that the agri-food-related sectors are closely linked in the regional economy, as the primary activities supply processing with raw inputs. Moreover, agri-food-related sectors have strong interconnections with the rest of the local economy and can induce economy-wide impacts. Accordingly, the interdependence between different economic sectors determines the agri-food sector’s economic impact.