Inter-industry Linkages Research Articles

The Average Propagation Length

The average propagation length (APL) has been proposed as a measure of the fragmentation and sophistication of an economy. For a one-sector economy, we show that the APL is strictly proportional to the macro multiplier of that economy. The same holds for strong intra-industry linkages. Hence, for comparing economies and comparing single industries, the concept of the APL is of no value. For pure interindustry linkages, however, we find that the length of the supply chain between two different industries is negatively related to the strength of the multiplier between those two industries, be it weakly. Hence, the APL should only be used to compare pure interindustry linkages.

Determinants of Capital Structure and Inter Industry Linkages

Determinants of Capital Structure and Inter Industry Linkages

THE DEVELOPMENT OF ECONOMIC STRUCTURE AND INTER-INDUSTRY LINKAGES IN THE BALTIC COUNTRIES

Abstract. The article presents an analysis of the production and trade structure in three Baltic countries. Both exports and imports were emphasized, pointing out the importance of regional shifts and specialization patterns. The research was performed using the input–output model to determine the relative importance of respective production changes over time and the key differences among the Baltic countries. The paper also analyses the backward and forward inter-industry linkages of manufacturing and service industries. The results have indicated that during the period under analysis the share of sectors creating a lower value added has decreased, and a deeper economic integration was observed in the majority of industrial sectors of the Baltic countries with manifesting stronger forward linkages.Key words: inter-industry linkages, economic structure, the Baltic countries

Social economic assessment of coastal area industrial development: An application of input–output model to oyster farming in Taiwan

This research is conducted to help newly economically developed countries identify the influences of multiple-use conflicts in coastal-zone policy-making, such as social (i.e. unemployment), and other economic (i.e. revenue) or ecological impacts. Taking Taiwan as an example, the study examined the inter-industrial linkages of oyster farming and the other industries in conflict and the impacts or values underlying policy-making on ecological advocacy and socio-economic development.The input–output (IO) model was applied to analyze inter-industrial linkages of sectors which have strong conflicts in coastal areas. The employment data was integrated into the physical IO model to assess the social and economic impacts of proposed industrial projects. The results indicate that adopting the aggregate multiplier of the fisheries sector to assess unemployment related to a decrease in the oyster farming output would seriously underestimate its impact. From an economic perspective, oyster farming shows a relatively low industrial linkage effect. From an environmental and social perspective, this industry provides important ecological benefits and employment effects. It is suggested that policy-makers may know that the traditional coastal aqua-cultural industry does not generate as much revenue as a new large-scale industry, but disregarding the ecological and social impacts of aquaculture would not be a sensible decision.

Examining Economic Linkages Between the Irish Convention Market and the Rest of the Economy: A Close-Knit Relationship

The potential of the convention market to generate economic activity is dependent on the strength of its interindustry linkages with the rest of the economy. These economic linkages vary between countries. Using input-output analysis, this study examines the linkages of the Irish international association convention market with the rest of the economy, and assesses its employment and output generating capacity. Findings show that over two-thirds of convention expenditure is spent in sectors with above average backward linkages. Convention expenditure also has considerable employment creating potential and was estimated to generate 15 full-time equivalent jobs per €1 million of spending.

The role of the marine sector in the Irish national economy: An input–output analysis

Abstract Recent research in Ireland has estimated both the national and regional economic value of the marine sector. However, economic activity does not exist in a vacuum. Activities in the marine sector not only directly affect the industries in the sector but also influence other sectors through inter-sectoral linkages. This paper uses an input–output (IO) methodology to examine the linkages and production effects of the Irish marine sector on the national economy. Disaggregating the Irish IO table for 2007 to include 10 additional marine sectors, this paper represents the first effort to quantify the inter-industry linkage effects, production-inducing effects and employment multipliers in the marine sector. This analysis found that a number of marine sectors, notably the maritime transportation sector, have an important economic role within the wider Irish economy.

집단에너지산업의 국민경제적 파급효과 분석

정부는 에너지 절약시책의 일환으로 제1,2차 석유파동 후 1983년에 목동신시가지에 집단에너지 사업을 도입하였다. 이후 집단에너지산업의 공급규모는 꾸준히 증가추세를 보이고 있다. 이에 본 논문에서는 2009년도 산업연관표에 근거한 투입산출분석을 이용하여 집단에너지산업의 국민경제적 파급효과를 분석하고자 한다. 수요유도형 모형을 이용하여 집단에너지산업에서의 생산 혹은 투자가 다른 산업에 미치는 영향에 대하여 논의한다. 공급유도형 모형을 적용하여 집단에너지산업에서의 공급지장이 다른 산업에 미치는 효과에 대해 살펴본다. 레온티에프 가격모형을 이용하여 집단에너지산업의 가격 변동이 다른 산업의 산출물 가격에 미치는 영향에 대해 검토한다. 특히 집단에너지산업을 중심에 놓고 이를 외생화하여 분석하는 접근방법을 취했다. 분석 결과를 요약하자면, 집단에너지산업은 낮은 생산유발효과, 높은 공급지장효과, 낮은 물가파급효과, 낮은 전방연쇄효과, 낮은 후방연쇄효과를 가진다. 이러한 정량적 정보는 집단에너지산업을 위한 정책결정에 있어서 유용하게 활용될 수 있다. Korean government has initiated integrated-energy business (IEB) in Mokdong for energy conservation in 1983. Since then, IEB has been steadily expanding. This paper attempts to apply input-output(I-O) analysis to examine the economic effects of IEB. A static I-O framework is employed, focusing on three topics in its application: the impact of the investment of IEB on the production of other sectors and the inter-industry linkage effect; supply shortage effects of the IEB ; and the impact of the rise in IEB rate on prices of other products. The paper pays closer attention to IEB sector by taking the sector as exogenous and then investigating its economic impacts. The results can be widely utilized in decision-making about IEB policy.

Industry Dynamics and Competition from Low-Wage Countries: Evidence on Italy

This paper analyses the effect of competition from low-wage countries on domestic activity, using data on 230 Italian manufacturing sectors between 1995 and 2007. We find that low-wage import penetration is negatively related to employment and other measures of activity. The effect is significantly lower in more skill, capital and R&D-intensive sectors and in more vertically differentiated sectors. There is also evidence of significant effects of low-wage competition through inter-industry linkages: employment is negatively related to low-wage import penetration in downstream sectors but positively related to low-wage import penetration in upstream sectors.

Las emisiones de metano (CH4) en el subsistema agroalimentario catalán: un análisis input-output alternativo

In this paper we carry out a research of the CH4 emissions related to the Catalan agro-food sector through an alternative or at least complementary, input-output subsystems analysis, which is a useful tool to study the productive structure of the different sectors that make up an economy. The application of this technique allows the decomposition of the subsystem in different effects depending on the existing interindustry linkages with all the production sectors of the economy inside as well outside the subsystem. Results highlights the relevance of intrasectorial relations within the agro-food industry subsystem, which shows a significant autonomy respect to this type of emissions with regard to the rest of the economy. This feature guides the sort of environmental policies to be implemented in order to reduce the atmospheric impact of such activity.

정보통신분야 인력양성에 대한 동태적 산업연관분석

본 연구는 공공부문에서 수행한 정보통신분야 인력양성사업을 평가하기 위하여 산업연관분석방법론에 최근 내생적 성장이론의 이론적 배경을 결합하여 정보통신산업관련 인적자본을 9개 산업으로 분류한 뒤에 정보통신분야 인적자본의 후방승수와 전방승수라는 두 가지 관점에서 분석하였다. 본 연구의 결과는 첫째, 예산의 투입에 따라 인적자본형성이 매년 증가함에 따라, 정보통신분야 인력양성사업은 경제적 외부성이 존재하고 있음을 뒷받침하고 있다. 둘째, 정부의 IT인력양성사업 중에서 전략적인 부분으로 후방연관효과가 큰 분야는 연구(R&D)분야로 나타나 인력양성(HRD)은 연구분야(R&D)와 연계해야 효과가 높은 것을 반증해 주고 있다. 또한 다른 산업에 유발효과가 높은 분야는 정보통신 서비스 부분(IT응용기술 교육)으로 나타났다. 셋째, 인력양성사업으로 인한 부정적인 효과인 가격상승효과도 존재하는데, 사업규모도 적고 일회성 사업 등에 대한 정책적 고려가 필요하다. 마지막으로, 인력양성사업이 유발하는 경제적 파급효과를 자체 부분의 직접효과와 다른 부분에 미친 간접효과를 합하여 계산할 경우, 전체적으로 정보통신분야 인력양성사업의 경제성은 매우 좋은 것으로 나타났다. 【This study investigates both backward and forward multipliers of human capital in the field of information technology in order to evaluate human resources programs which were executed in the public sectors. Dynamic interindustry linkages analysis was employed as a methodology after classifying human capitals related to information technology into 9 industries. First, empirical findings showed that there are economic externalities in the IT HRD programs when the formation of human capital increases with more investment in them. Second, another finding was that the effect of HRD programs could be powerful when HRD programs were closely connected with R&D programs, showing that R&D programs among IT HRD programs have huge backward linkage effect. In addition, IT service sector has its own spill-over effect to other industries. Third, however, small budget and one off HRD programs should be considered as a negative price synergy effect. Finally, overall economic feasibility of IT HRD programs turned out to be excellent with consideration of their own economic direct and indirect effect.】

A new kind of production and value-added multiplier for assessing the scale and structure effects of demand shocks in input–output frameworks

The main purpose of this paper is to develop a new kind of input–output multiplier that would be particularly well suited to quantifying the impacts of final demand changes on the sectoral output or value-added growth potential of an economy. Instead of using the traditional output multipliers, solving an appropriate optimization problem provides what can be called input–output Euclidean distance multipliers. The method does not impose unitary final demand shocks with a fixed (predetermined) sectoral structure, thus allowing the economy to change across the spectrum of all possible final demand variations represented by vectors of modulus 1. It can be very helpful in measuring interindustry linkages and key sectors in a national or regional economy. An empirical illustration is made, using national (Spain and Portugal) and regional (Balearic Islands and the Azores) input–output data.

태평양 심해저 망간단괴 개발사업의 경제적 파급효과

The securing of raw material is an important requirement for economic development. Many countries, including Korea, actively seek out a stable supply of minerals such as manganese. Manganese nodules are rock concretions on the sea bottom formed of concentric layers of iron and manganese hydroxides around a core and include several strategic minerals necessary for economic development. In particular, the manganese nodule development project (MNDP) plays an important role in the Korean national economy. This study attempts to apply input-output (I-O) analysis in investigating the economic impacts of the MNDP in the Korean national economy. A static I-O framework was employed, focusing on four topics in its application; the production-inducing impacts, the value-added-inducing impacts, the employment-inducing impacts and R&D-inducing impacts of MNDP investments on other sectors. To this end, several versions of the demand-driven models are utilized. In addition, inter-industry linkage analysis is performed to obtain information on the forward and backward linkage effects of industries, including MNDP, to quantify the strength of causation among these industries.

The Role of the Oil Industry in the Korean National Economy: An Input-Output Analysis

The oil industry has played an important role in the economic development of Korea, but recent skyrocketing oil prices are likely to stunt the Korean economy and prevent it from advancing in the long run. This article attempts to apply input-output (I-O) analysis to investigate the role of the oil industry in the Korean national economy. A static I-O framework is employed, focusing on three topics in its application: the impact of oil supply investment on the production of other sectors and the inter-industry linkage effect; the oil supply shortage effect; and the impact of the rise in oil rate on prices of other products. This article pays particular attention to the oil industry sector by taking the sector as exogenous and then investigating its economic impacts. Moreover, potential uses of the results are illustrated from the perspective of policy instruments and some policy implications are discussed.

Foreign Direct Investment and Wage Spillovers in Vietnam Evidence from Firm Level Data

This paper examines the impact of FDI on wages paid by domestic private firms in Vietnam. The existing literature has examined the impact of foreign firms on domestic firms' wage levels within an industry. We expand on the literature by examining inter-industry linkages as an additional conduit for wage spillovers. There is strong evidence of horizontal wage spillovers from foreign firms to domestic private firms in Vietnam, despite different labour market conditions and firms' characteristics. Vertical wage spillovers exist, but depend on the specific characteristics of firms and industries. A further finding is that training activities facilitate wage spillovers.

It was all Gonna Trickle Down

A theory is developed in which the extent to which growth in advanced industrial sectors trickles down to other sectors is dependent upon, capital market frictions, migration, and the strength of inter-industry linkages. It is shown that perverse results can arise, and that the efficacy of any policies that rely on tricke-down is therefore an empirical issue. Using data from India, we investigate whether growth in the advanced sectors generates growth elsewhere in the economy, and find that it does not.

Measuring energy linkages with the hypothetical extraction method: An application to Spain

Efficiency improvements in energy use are nowadays one of the main concerns of policy makers and plans of action have been designed to achieve targets such as those of the Kyoto protocol. The measure of their success will depend on the degree that these plans spread through the system. In this light the inter-industry linkages turn out to be quite significant for the effectiveness of policies. We propose in this paper an adaptation of the hypothetical extraction method to measure the role of energy and non-energy efficiency gains in an interconnected, multisectorial economy while relating the results to the Rebound effects literature.

Uncovering and Developing Industry Clusters

ABSTRACT This paper observes that the existing definitions of clusters can be grouped under two categories: intra-industry clusters, and inter-industry clusters. Economic geographers and strategy researchers suggest “intra industry” conceptualisations of clusters. Regional economists subscribe to the Porterian model of clusters that focuses on inter-industry linkages. While we agree that clusters should assess inter-industry linkages, we argue that the process of identifying clusters should begin at the intra-industry level. A conceptual framework based on ‘strategic groups’ theory and value system analysis is developed as an explanation for industry clusters. Keywords: Strategic Groups, Value System Analysis, Regional Economics

Pembangunan Jadual Input-Output Wilayah dan Analisis ke atas Struktur Industri Selangor

Artikel ini membentangkan hasil kajian ke atas pembangunan jadual input-output negeri Selangor yang dianggar dengan menggunakan teknik RAS pada tahun 2000. Dengan menggunakan andaian kesamaan penggunaan input dan teknologi pengeluaran antara Selangor dan Malaysia, struktur aliran antara industri Selangor dianggar berasaskan struktur aliran antara industri nasional. Jadual input-output yang dianggar kemudiannya digunakan untuk menjalankan analisis ke atas struktur pengeluaran industri Selangor. Hasil kajian mendapati Selangor memiliki struktur pengeluaran industri yang sederhana dan terlalu bergantung kepada import dan eksport. Analisis ke atas kaitan antara industri mendapati sektor pembuatan, perlombongan dan kuari, dan perkhidmatan kerajaan merupakan sektor-sektor strategik di Selangor yang dapat memberi impak besar ke atas pembangunan ekonomi negeri.

A first empirical comparison of energy Footprints embodied in trade — MRIO versus PLUM

The Ecological Footprint as an indicator that accounts for human demand on global bioproductivity sets out to quantify the impacts associated with consumption in a given country, including the impacts associated with trade. The National Footprint Accounts (NFA) by Global Footprint Network (GFN) calculate trade-embodied Footprints by multiplying yield and embodied energy factors with mass volumes of traded goods in a “Product Land Use Matrix (PLUM)”. This article compares energy Footprints embodied in trade from and to the United Kingdom in 2002 as calculated by the NFA-PLUM with the results from a recently developed multi-region input–output model (MRIO) for the UK. Although totals for imports and exports are comparable, breaking down the results by economic sectors reveals large differences and hardly any correlation between the two methods. The omission of trade in services (especially transport services) and upstream impacts of energy goods (fossil fuels) and the use of inappropriate embodied energy factors in the NFA-PLUM method are identified as the main reasons for these differences. In the light of the results it seems that a comprehensive Footprint account of trade can better be achieved with an input–output based approach. I conclude that MRIO models – once fully developed – will be particularly suitable in the future to estimate the Ecological Footprints of imports and exports of nations with the possibility to track their origin via inter-industry linkages, international supply chains and multi-national trade flows.

Analysis of the role of maritime freight transport industry in the Korean national economy

The maritime freight transportation industry has played an important role in the Korean economy. The Korean maritime freight transportation industry is faced with a period of transforming it competitively and efficiently in this global age. This paper, therefore, aims to identify the impact of the maritime freight transportation industry in the Korean national economy. Hence, this paper provides policy-makers with accessible and reliable information regarding the role of the Korean maritime freight transportation industry. This study employs input-output (I-O) analysis to examine the role of the maritime freight transportation industry in the national economy for the period 1995-2003, with specific application to Korea. This study pays particular attention to the maritime freight transportation industry by taking the industry as exogenous variable and then investigates its economic impacts. We identify inter-industry linkage effects in 20 sectors, production-inducing effects, added value-inducing effects, and supply-shortage effects of the maritime freight transportation industry.