Interindustry Relationships Research Articles

Forecasting Structural Change With a Regional Econometric Input‐Output Model

The sophistication of regional economic models has been demonstrated in numerous ways, most recently in the form of linking several modeling systems or in the expansion in the number of equations that can be manipulated successfully to produce impact analyses or forecasts. In this paper, an alternative perspective is employed. What do regional macro‐level forecasts indicate about the process of structural change? A new methodology is illustrated that enables analysts to make forecasts of detailed structural change in the interindustry relations in an economy. Using a regional econometric input‐output model developed for the Chicago metropolitan region, derived input‐output tables are extracted for the period 1975–2016. These tables are then analyzed to determine the forecasted direction of structural changes for the region. The innovation illustrated here is based on a model that exploits the general equilibrium spirit of computable general equilibrium models through the adjustment of input coefficients to clear markets.

Linkage Effects and Environmental Impacts from Oil Consumption Industries in Taiwan

Input–output modeling and cluster analysis are used to assess the impacts of oil consumption industries on environmental quality and inter-industry relationships in Taiwan. Results indicate that fuel oil has the greatest impact on the environment. The transportation sector has grown rapidly with high energy intensity and severe pollution emission in Taiwan. Also, power generation, other industrial chemicals, paper products, non-metallic mineral products, petro-chemical materials, rubber products, cement and textiles are identified as the most significant industries causing serious pollution problems in Taiwan. Results of inter-industry linkages confirm that investment of the above-mentioned industries should be adjusted to better energy efficiency, environmental quality and economic bases. This study indicates that energy policy should integrate environmental policy, in addition to assuring energy and economical gains.

Economic impacts of theme-park development by input-output analysis: a process toward local industrialization of leisure services

The economic impact of leisure park development in Japan is analyzed by input-output analysis. Significant impact is identified in the industrial sectors ‘construction’ and ‘light electricity’ before opening, and ‘services’ after opening. The structures of inter-industry relations are discussed in the context of land use, political support, and the quality of experience. The issue of deregulation for the rational development of leisure parks and promotion of local industry is identified as particularly important. The study concludes that it would be of advantage to the cause of leisure development to identify more accurately and more systematically the effect of leisure developments on inter-industry relations in the local economy, by more widespread use of input-output analysis.

Relations and Profits: The Social Organization of Israeli Industrial Competition

This paper examines a structural theory of industrial organization and operation. The analytical approach taken is largely based on the premise that industry is embedded in the social structure of market competition. Moreover, imperfect competition and industrial resource dependence are composed of and reflected in interindustrial transaction patterns. Using network models of imperfect competition, this study explains the determinants of Israeli industrial performance. The first part of this paper inquires into the structure of interindustrial relations using structural equivalence as a diagnostic tool. In the second part structural determinants of industrial profitability are estimated. Profitability is predicted by the degree of control an industry has over its domestic transactions and its linkage to the world economy. Implications of this study for the theoretical models of social competition and for an empirical analysis of markets and firms are discussed.

The estimation of energy consumption and amount of pollutants due to the construction of buildings

In this paper, the total energy consumption and environmental pollution caused by construction are quantified using the Inter-Industry Relations Table in Japan. The size of the six buildings which are evaluated in this study vary from 1502 m 2 to 216 000 m 2. The major results are as follows: • total energy consumption caused by construction of office buildings is 8–12 GJ/m 2 of floor area; • CO 2 production is 750–1140 kg, SO and SO 2 720–1430 g, NO and NO 2 700–1140 g, dust 70–130 g per m 2 of floor area; • the construction cost per square meter of floor space is proportional to the energy consumption and production of pollutants; • Structural work is shown to be high in energy consumption and CO 2 exhausted per unit cost of construction; industrial waste exhausted in finishing work is higher than two other categories of the work (structure and equipment); equipment work is shown to be relatively low in energy consumption, CO 2, NO, NO 2 and industrial waste produced.

Influence of Interindustrial Relationships on Prices in Czechoslovakia

Price elasticities and an input–output decomposition of price changes are investigated in this paper. They describe the relationships between the material flows, financial flows and prices, and allow the factors determining price development to be identified. For the Czechoslovak economy the computed price elasticities express a rigidity of income and production sensitivities on prices. These price elasticities also show a rigidity of important interindustrial relationships with respect to price development in the whole time period investigated. Results from the input–output decomposition of price changes indicate the importance of a decrease in complex coefficients as an anti-inflation factor in the intermediate goods market. From the standpoint of transformation to a market economy the results have a special meaning in view of the need for a well-functioning intermediate goods market as one of the basic assumptions for convergence to a prosperous market system in the whole national economy.

Central place theory and intercommunity input-output analysis

This paper explores trade hierarchies and interindustry relationships, first in theory, then in the empirical context of a western United States timber economy facing a large reduction in its timber harvest. Principles of central place theory guide construction of a hybrid intercommunity input-output model. A nonsurvey technique for estimating central place trade is developed, and is compared with MRIO methods. The effect of central place dominance on intercommunity multipliers is examined theoretically, as is the nature of feedback linkages in a central place hierarchy. The empirical magnitude of feedback effects is small, and although effects vary in magnitude from community to community, neglect of central place considerations can understate intercommunity sawmill multipliers by as much as 36 percent.

CENTRAL PLACE THEORY AND INTERCOMMUNITY INPUT‐OUTPUT ANALYSIS

ABSTRACT This paper explores trade hierarchies and interindustry relationships, first in theory, then in the empirical context of a western United States timber economy facing a large reduction in its timber harvest. Principles of central place theory guide construction of a hybrid intercommunity input output model. A non‐survey technique for estimating central place trade is developed, and is compared with MRIO methods. The effect of central place dominance on intercommunity multipliers is examined theoretically, as is the nature of feedback linkages in a central place hierarchy. The empirical magnitude of feedback effects is small, and although effects vary in magnitude from community to community, neglect of central place considerations can understate intercommunity sawmill multipliers by as much as 36 percent.

Using interindustry input-output relations as a Bayesian prior in employment forecasting models

This paper presents the results of using input-output tables as a source of Bayesian prior information in a national employment forecasting model. A Bayesian vector autoregressive (BVAR) estimation technique is used to incorporate the interindustry input-output table relationships into the labor market forecasting model. This technique requires that a simple translation of the direct use coefficients from the input-output table be used as prior weighting elements to depict the interindustry relations. The Bayesian model provides out-of-sample forecasts superior to those from unconstrained vector autoregressive, univariate autoregressive, a block recursive bvar model and a naive BVAR model based on the Minnesota random walk prior. This suggests that interindustry input-output table linkages provide useful information that can be effectively incorporated into labor market forecasting models.

Linkages and Vertical Integration in the Chinese Economy

The original concept of vertical integration can be applied only to the analysis of the relationship between final demand and gross output, but is unsuitable for most of supply-oriented studies, where what matters are the interindustry relations. For example, vertical integration of an industrial district with the rest of the economy cannot be measured with the traditional technique and should be accounted for by a different measure that considers the direct and indirect demand derived from the whole gross output of the district. In such a way it is possible to measure the expansionary potential that any industry has on any other one, constructing an index of vertical integration. These concepts are then applied to the input-output table of a developing country like China and they provide some understanding of the routes development strategies have to follow. Copyright 1991 by MIT Press.

Structural Change in Pakistan's Interindustry Relationships

This paper examines and discusses the structural change in Pakistan's interindustrial relationships by comparing the direction of change in the input–output coefficients of the direct input requirements matrix, the total requirements matrix and the business multipliers over the periods 1975–76 and 1984–85.

Evaluation of Indirect Economic Effects Caused by the 1983 Nihonkai-chubu, Japan, Earthquake

Effects of an earthquake are not necessarily restricted to damage of structures, but extend much further. This paper presents a method for estimating indirect economical effects caused by an earthquake. Loss of production may be caused by a decrease of products due to damage of production, damage of transportation facilities, and damage of materials and goods. Effect of investment for restoration is also considered. Based on direct loss associated with production loss, a secondary “ripple” effect was estimated through an inter-industry relation analysis (input-output analysis). The procedure was applied to the Nihonkai-chubu, Japan, Earthquake of 1983. Estimated gross products at the damaged region agreed fairly well with those actually observed after the earthquake.

Regional Cyclical Instability: An Empirical Examination of Wage, Hours and Employment Adjustments, and an Application of the Portfolio Variance Technique

KURRE J. A. and WELLER B. R. (1989) Regional cyclical instability: an empirical examination of wage, hours and employment adjustments, and an application of the portfolio variance technique, Reg. Studies 23, 315–329. We investigate issues related to regional cyclical instability through an examination of twenty-five years of monthly data for the Erie, Pennsylvania, regional economy. The first portion of the analysis examines the relationship among wages, hours worked per week, and employment in the manufacturing industries. Over the study period, Erie manufacturers tended to adjust to cyclical fluctuations primarily by hiring and firing, and to a lesser extent, by adjusting hours worked per week. The study finds no evidence of cyclical adjustments in nominal wages. The paper then demonstrates the use of the portfolio variance technique in measuring and analysing regional cyclical instability in employment. The portfolio variance measure focuses on interindustry relationships with respect to both the degre...

Inter-industry relations in electronic news services

Les developpements des technologies informatiques et de telecommunication ont induit des relations et des produits industriels nouveaux et changeants. Cette etude presente la croissance de deux types de publications electroniques: le videotex et teletexte, plus particulierement aux Etats-Unis entre les annees 1974 et 1984. Elle est fondee sur la theorie de la dependance des ressources

The crisis in fordism and the rise of a new technological paradigm

The sometimes contradictory general tendencies in social and institutional structures spring partly from control problems and partly from the application of new technology. In contrast to the mass-production concept which was so characteristic of Fordism, now other features are appearing: flexibility, deregulation, dualization and polarization, and segmentation. As a result, existing labour and social relations, as well as interindustrial relations, will be drastically changed. In nearly all economic and social areas there appears to be a tendency toward flexibility. Greatest flexibility is found in the size of the workforce and the next most flexible area is the input level of a variety of tasks demanded of employees (so-called internal flexibility).

Analysis of Inter-industry Relations in Pakistan: Some Further Experiments with the 1975-76 Data

Input-Output (1-0) tables of Pakistan's economy for the year 1975-76 were published by the Pakistan Institute of Development Economics (PIDE) in 1983. They delineated the structure of production of 118 industries together with the disposition of their output by five categories of final demand: consumption expenditures; gross fixed capital formation; changes in stocks; exports; and re-exports. Import have been shown to be absorbed as intermediate inputs as well as destined for final consumption. The present author presented an analytical paper [3], based on the said data-base, in which despite the useful industrial details captured, the predominant agrarian nature of Pakistan's economy was emphasized. Agricultural sector's contribution to the total gross domestic product (CDP) at factor cost amounted to 22.1 percent. Although the 1-0 tables identified some 81 manufacturing industries - both large-scale and small-scale - there were only seven industries whose contribution to the total CDP was of any significance. The manufacturing sector, as a whole, contributed only about 11.7 percent of the total CDP. Service industries, construction and the like still account for the rest of the CDP.

Statistical Approaches to Structural Change in Regional Interindustry Models

The conventional approach to assessing structural change in regional input – output tables is to measure the impact of coefficient change on the estimation of outputs and multipliers. The methods developed and tested in this paper focus exclusively on the coefficients. Univariate and multivariate statistical analyses can be used to identify and measure various types of changes ranging from coefficient instability to changes in interindustry relationships as a system. A distinction is made between structural changes in input relationships and those in output relationships. The methods are tested by using Washington State data for the years 1963 and 1967. The results are compared with previous analyses of change in these data.

Economic Sources of Corporate Political Consenses: An Examination of Interindustry Relations

This paper examines the sources of political consensus between major industries in the American economy, employing data on campaign contributions of corporate political action committees in the 1980 Congressional elections. Drawing on elements of the resource dependence and social class models of intercorpoorate relations, we examine the effects of volume of transactions between industries, the economic leverage of one industry over another, and interlocking directorates, on the similarity of contributions between dyads created by fourteen major industries. Volume of transactions is negatively related to consensus, as are direct interindustry officer interlocks. However, economic leverage between industries is associated with increased consensus, suggesting the importance of this variable as a source of conflict resolution within the business community.

Analysis of Inter-Industry Relations in Pakistan for 1975 -76

Input-Output tables provide a detailed accounting of the goods and services that individual industries buy from and sell to each other, and , therefore, constitute a useful medium for an analysis of the interdependent nature of the various sectors of an economy. The PIDE's release of input-output (I-D) tables of Pakistan's economy for the year 1975 -76 [9] is an important contribution in this respect. An 'open' output determination of model of the Leontief type is applied to the said data base to delineate the structural interdependence of Pakistan's economy. Some salient features of the economy such as sectoral distribution of the value added, cost composition of the value of sectoral outputs, output and income multipliers are discussed in Section l. The notion of interdependence arising through technological interconnections between various sectors implies structural linkages - both “backward” and “forward”. Quantification of these linkages provides an effective way of identifying "key sectors" of the economy. Section II discusses the methodology used and the empirical results obtained pertaining to key sectors of the Pakistan's economy. Some concluding remarks are offered in Section Ill.

Interindustry Technology Flows and Productivity Growth: A Reexamination

The relationship between productivity growth and R and D intensity is reexamined using detailed data for 193 US manufacturing industries and a breakdown of R and D into own product and process improvement oriented components and ''imported'' R and D from other industries. A significant interindustry relationship between total factor productivity growth and R and D intensity is reconfirmed, with ''used'' R and D having larger coefficients than own product R and D components. But ''own'' product R and D is also significant and the explanatory power of the ''used'' R and D component rather than the embodied component imported from other industries. Thus, the evidence for R and D spillovers remains tenuous. 6 references, 2 tables.