Production Linkages Research Articles

Análisis de subsidio al sector silvícola de la región del Biobío, Chile

El objetivo del presente estudio es evaluar, desde una perspectiva económica y ambiental, los impactos de la aplicación de un subsidio a la plantación forestal sobre los sectores económicos de la región del Biobío, Chile. Para ello se utiliza el modelo de precios de Leontief que permite simular impactos sobre los precios sectoriales, consumo, gasto fiscal, índice de precios y emisiones. Los resultados muestran que si se renueva el subsidio que estuvo vigente hasta el año 2012 en Chile, los precios en el sector silvícola se reducirían en 11,74%, mientras que los precios de sectores relacionados como madera y muebles, agropecuario y celulosa y papel presentarían reducciones de 0,94%, 0,54% 0,42%, respectivamente. Lo anterior estimularía la producción del sector silvícola favoreciendo la captura de emisiones de gases de efecto invernadero. Además, debido al encadenamiento productivo, la contribución del subsidio al total de la producción de todos los sectores equivaldría a 0,11% del PIB regional, a partir de un gasto fiscal de 0,03% del PIB regional.

Disentangling the coupling between sea ice and tundra productivity in Svalbard

The rapid decline in Arctic sea ice poses urgent questions concerning its ecological effects, such as on tundra terrestrial productivity. However, reported sea ice/terrestrial productivity linkages have seldom been constrained, and the mechanism governing them remains elusive, with a diversity of spatial scales and metrics proposed, at times in contradiction to each other. In this study, we use spatially explicit remotely sensed sea ice concentration and high-resolution terrestrial productivity estimates (Normalised Difference Vegetation Index, NDVI) across the Svalbard Archipelago to describe local/sub-regional and large-scale components of sea ice/terrestrial productivity coupling. Whereas the local/sub-regional component is attributed to sea breeze (cold air advection from ice-covered ocean onto adjacent land during the growing season), the large-scale component might reflect co-variability of sea ice and tundra productivity due to a common forcing, such as large-scale atmospheric circulation (North Atlantic Oscillation, NAO). Our study clarifies the range of mechanisms in sea ice/terrestrial productivity coupling, allowing the generation of testable hypotheses about its past, present, and future dynamics across the Arctic.

Biochemical Characterization of the Functional Roles of Residues in the Active Site of the β-Galactosidase from Bacillus circulans ATCC 31382.

The β-galactosidase enzyme from Bacillus circulans ATCC 31382 BgaD is widely used in the food industry to produce prebiotic galactooligosaccharides (GOS). Recently, the crystal structure of a C-terminally truncated version of the enzyme (BgaD-D) has been elucidated. The roles of active site amino acid residues in β-galactosidase enzyme reaction and product specificity have remained unknown. On the basis of a structural alignment of the β-galactosidase enzymes BgaD-D from B. circulans and BgaA from Streptococcus pneumoniae, and the complex of BgaA with LacNAc, we identified eight active site amino acid residues (Arg185, Asp481, Lys487, Tyr511, Trp570, Trp593, Glu601, and Phe616) in BgaD-D. This study reports an investigation of the functional roles of these residues, using site-directed mutagenesis, and a detailed biochemical characterization and product profile analysis of the mutants obtained. The data show that these residues are involved in binding and positioning of the substrate and thus determine the BgaD-D activity and product linkage specificity. This study provides detailed insights into the structure–function relationships of the B. circulans BgaD-D enzyme, especially regarding GOS product linkage specificity, allowing the rational mutation of β-galactosidase enzymes to produce specific mixtures of GOS structures.

Foreign Direct Investment and Rural Farm and Nonfarm Sectors in a Developing Economy

The rural nonfarm sector has been increasingly becoming a key determinant of the economic development of a developing economy. It is supposed that with process economic development of the nonfarm sector would expand and employ a greater proportion of the workforce previously engaged in the farm sector. We have built up a three-sector Harris–Todaro type dual economy model for a small open economy to investigate the consequences of the liberalized investment policy resulting in higher foreign direct investment (FDI) on the competitive rural sector wage and the urban unemployment problem taking into consideration the “consumption linkage” between the rural farm and nonfarm sectors. We have found that FDI unambiguously raises the rural wage and leads to a contraction of the farm sector. However, the consequence on the urban unemployment problem crucially hinges on the elasticities of demand for the nonfarm product and the proportion of the workforce employed in the urban sector. We have then extended the basic model to consider the “production linkage” between the two sectors in lieu of the “consumption linkage”. The results of the basic model are found to be approximately valid even in this case. Finally, we have advocated a few policies that should be adhered to assist both the farm and the nonfarm sectors to grow simultaneously which would not only make the common workers better off and mitigate the unemployment problem but would also lessen the degree of income inequality existing among the different groups of the working population.

Production Linkages in and between Places : The Recent Development of the Bicycle Industry Agglomeration in Osaka

Production Linkages in and between Places : The Recent Development of the Bicycle Industry Agglomeration in Osaka

China and the great trade collapse: employment effects of falling exports to the EU and US

The paper investigates employment effects of falling exports from China to the EU and US during the great trade collapse of 2008–9. The paper uses fixed multiplier analysis to address employment effects resulting from input-output production linkages between trade and employment as well as from associated changes in household income and expenditures. Main findings are that substantial negative employment effects resulted in China from these linkages; that a large share of these employment effects were income-induced; and that industries in which women workers were disproportionately represented were harder hit through these linkages.

Decoupling the lock-in effect between economic growth and CO2 emissions by structure adjustment: A final demand perspective

This study incorporates demand emission sensitivity into a programming model to explore the issue of decoupling the lock-in effect between economic growth and CO2 emissions through structure adjustment from a final demand perspective. As a demonstration, the proposed methodology is applied to data from China for the year 2012, the most relevant productive linkages and the most sensitive components of final demand in terms of CO2 emissions were identified. The results indicate that to formulate better carbon mitigation policies, we should pay more attention to the main internal linkages in terms of CO2 emissions within the economy.

Sensitivity analysis of China’s energy-related CO2 emissions intensity for 2012 based on input–output Model

This paper employed a sensitivity analysis based on the input-output model to identify the key sectors and main productive linkages between activity branches in terms of CO2 emissions in China. In particular, we established the Chinese energy-input-output table for 2012. Based on the input-output data, sensitivity analysis, is introduced to probe into two major drivers, i.e., the emissions intensity coefficient (c) and technology coefficient (B). The results show that (1) Regarding the driver c, the top six emissions-intensity sectors are tested to be the key sectors which will cause the highest emissions. (2) For B, the emissions intensity is the most sensitive to the technology change of the Production and supply of electric power and heat industry (n4) with direction transaction relation. (3) With respect to the values of two elasticity indicators for B, these sectors with a higher “structure-relevant” have a lower “technology-relevant”. This implied that the technology coefficient has more influence on the CO2 emission intensity of n4 after considering the structural impact of final demand. Emphatically, the analytical method used in this study can provide valuable information for planners and decision makers to formulate feasible and practical industrial policies with implications for CO2 emissions.

Energy-related GHG Emissions for Inland and Municipal Economy in Chongqing: Factor Dynamics and Structure Decomposition

Abstract As the largest and most populous city in China, Chongqing has a unique municipal economy structure and challenges in GHG emissions abetment that are greater than those of other cities. This paper quantifies sources of emissions growth in Chongqing using an IO-SDA framework. The twelve components studies are classified into three categories: change in intensities, production linkages, and final demand. The results show that the crucial factor of GHG emissions reduction is change of intensities, and the main cause of emissions growth is expansion of final demand.

How Do the Trans‐Pacific Economies Affect the USA? An Industrial Sector Approach

AbstractThis paper studies how the Trans‐Pacific region affects theUSeconomy in terms of business cycle transmission. We use a large data set consisting of disaggregated sectoral industrial production indexes from selected countries in the region and employ a factor‐augmented vector autoregression (FAVAR) approach to analyse the transmission of shocks in different industries. We find that a positive output shock in the entire Trans‐Pacific region has positive effects on the majority ofUSmanufacturing sectors. We also find that sectoral shocks in five sectors of the Trans‐Pacific region have a large impact on the overallUSeconomy. Three of the five sectors displayed strong same‐sector responses relative to the overall response, suggesting that vertical production linkages might play a key role in the transmission of shocks. Our results highlight the importance of examining industrial sectors in studying the transmission of shocks in the Trans‐Pacific region.

Financing for Regional Economic Integration for Northeast Asia

The Northeast Asian region is one of the most dynamic economic regions in the world, which includes the major players of China, Japan and Korea, with productive linkages to resource-rich Russia and Mongolia and to the United States. In contrast to the region’s robust economic growth regional security has long been fragile, mainly due to the geopolitical condition resulting from the Cold War era.If the countries in Northeast Asia wish to further their development and prosperity, they will have to learn to harness their dynamic economies and create a region in which peaceful coexistence and common prosperity prevail. Northeast Asia has a northern subregion that includes North Korea, Mongolia, the Russian Far East, and the northeastern provinces of China - an area that is well - endowed with latent natural and human resources. This subregion has the potential of becoming an important source of natural resources for the entire region, and what is needed is to realize that potential through infrastructure investment.Energy security and environment is for example, an important area of cooperation, as the three major countries are heavily dependent on energy imports and are highly vulnerable to energy crisis. Financing requirements for the necessary cross-border infrastructure are likely to be large, and a regional development bank is a key in meeting that financing need.This volume, which is a sequel to the first volume, Financing for Regional Economic Integration for Northeast Asia, is comprised of papers, research reports and summaries of a main conference and several specialized meetings, as well as affiliated activities, that took place under this project. The results of this project represent a considerable beneficial to the region and have been carried out in a spirit of cooperation that we esteem.

Financing Regional Economic Integration and Functional Cooperation for Northeast Asia: A Multilateral Financial Institution for Northeast Asia

The Northeast Asian region, despite the recent changes in political leadership in the major countries of China, Japan Korea and Russia as major players, is still one of the most dynamic economic centers of the world. With its own capital resources and advancing technology along with enormous resources in Russia and Mongolia, and productive linkages to the Pacific and North America, the region continues to play a pivotal role in the global economy. This is a remarkable development in that for centuries until the later part of the twentieth century, this region suffered from the political environment of military conflicts, tension, and territorial rivalries among the major powers of China, Japan, Russia, and the United States. Even with the phenomenal economic growth in the region in recent decades, regional security and stability has been fragile, mainly attributable to the geopolitical conditions resulting from the Cold War era. In the twenty-first century, for the countries in Northeast Asia to further their development aimed at creating a region in which peaceful coexistence and common prosperity prevail, functional economic cooperation is essential to harness the individual economies together. This is a challenge for the Northeast Asian countries, and initiating specific functional cooperation is one concrete and constructive approach toward meeting this challenge.Northeast Asia is one region of the world where a formal regional institutional mechanism comparable to the European Union or ASEAN has yet to be developed. Yet, it is crucial for the Northeast Asian countries to continue to promote region-wide cooperative projects. The Korea Institute for International Economic Policy (KIEP) and the Northeast Asia Economic Forum (NEAEF) have been cooperating on the effort toward achieving closer economic and financial cooperation in the region, and this volume presents the results of the project implemented in 2012 to develop a regional institutional arrangement for financing cross border infrastructure developments and thereby regional economic integration.The northeastern part of China, North Korea, Mongolia, and the Russian Far East together constitute an area that is well-endowed with natural, energy and human resources. This sub-region has the potential of becoming a tremendous source of natural resources for the entire region, and what is needed is to realize that potential through cross border infrastructure developments. Energy security and efficiency, coupled with protection for the environment, and the promotion of green growth, for example, is an important area of cooperation, as the three major countries of China, Japan and Korea are heavily dependent on energy imports and are highly vulnerable to energy crises. Financing requirements for the necessary cross-border infrastructure are likely to be large, and a regional financial institution is a key to meeting that financing need.This volume, fourth in the series of proceedings volumes titled, Financing Regional Economic Integration and Functional Cooperation for Northeast Asia: A Multilateral Financial Institution for Northeast Asia, comprises papers, research reports, and summaries of a main conference and several specialized meetings, as well as affiliated activities, that took place under this project. The results of this project represent activities contributing to the regional economic integration and have been carried out in a spirit of cooperation.

LINKAGES, POTENTIAL AND SPATIAL EFFICIENCY OF PADDY PRODUCTION IN EAST JAVA

East Java has a big role in supplying agricultural product for nasional logistic. The problems are not completely resolved, regional development planning should integrate sectoral and spatial approach. The focus of study is to analyze the linkage of rice production to other sectors, in order to develop rice production. Research using the Input-Output models, Location Quotient to measure the degree of relative specialization of a region, and DEA to measure the performance of spatial efficiency. The result used IO table in 2010, contributors backward linkage of paddy sector are paddy sector itself, fertilizer and pesticide sector, also agriculture services and hunting, while the backward linkage contributors are paddy sector itself, rice sector, and food products and beverages. Spatially there are 28 areas that are able to serve the market of paddy products. If related to production efficiency, there are nine areas are included in the category of efficient production, with input in the form of land, and the number of farmers. Policy Implication related to the findings of input output approach, are the affordability of input proces, the streamlined of input distributing system, and the goes on education and information to the farmer about input usage. Whereas, related to the spatial aspect, in soft infrastructure as strengthening internal capacity of farmer and instructor. In the other hand, hard structure aspect especially restoration of irrigation, allocating best seed and fertilizer for farmer.

Geosystem services: A concept in support of sustainable development of the subsurface

Because functions of the subsurface are hidden from view, its important role in society is often taken for granted. Underground use in cities and subsurface resource extraction rapidly increase. Ensuring sustainability of the subsurface role requires balancing between exploitation and conservation, recognizing the non-renewability of abiotic resources and the long time cycles in the subsurface.This paper introduces the concept of geosystem services as a framework to analyze the issue of sustainable use of the subsurface in a systemic and holistic manner. Four main elements make up the framework: geosystems, services, values, and governance. Complementarity between the concepts of geosystem and ecosystems services is highlighted by classifying geosystem services in provisioning, regulating, cultural and supporting services. Geosystem services are distinguished from ecosystem services by systematically reflecting on three cross-cutting themes (i.e. space, scale and time). Applying the concept of ‘geosystem services’ results in improved integration in areas where trade-offs occur between ‘geosystem services’ stemming from the subsurface and ‘ecosystem services’ at surface. The geosystem services concept helps framing a more sustainable process of urbanization, and contributes to a spatially explicit linkage of (mineral) resource production to consumption, environmental impacts on the ecosystem and (global) governance of resources and resource efficiencies.

Agriculture Is Still the Engine of Economic Growth: Empirical Evidence from Uttar Pradesh, India

This paper assesses intersectoral linkages in Uttar Pradesh to identify the lead sector in its economy. It is based on time series data spanning 1980/81 to 2009/10 and used the vector autoregression framework to examine intersectoral linkages. The results suggest that agriculture is the main sector driving the other sectors (industry and services) in the state. Agriculture supports both the industry and service sectors through demand and production linkages. Despite being the leading sector in the economy, the performance of agriculture is far from satisfactory. The findings underscore the need to revive the agriculture sector to achieve high economic growth in the overall economy of the state. Further, the paper recommends developing the emerging food processing industry because of the state's strong potential for competitive advantage.

Host-site institutions, regional production linkages and technological upgrading: a study of automotive firms in vietnam

Using technological capabilities as embodied in machinery, organization, processes and products, this study examines the links with host-site institutions and regional production linkages. The statistical results show no relationship between these variables. In-depth interviews complement the quantitative findings. Overall, the result shows that the government’s localization efforts failed because too many joint-venture assemblers were approved in the 1990s when the domestic market was small. The lack of economies of scale also affected the growth of national suppliers. Hence, national producers are confined to low value added segments and lack the quality to compete in export markets.

The collapse of Japanese companyist regulation and survival of the upstream industry: developing East Asian production linkage

The rise of the global economy has transformed competitive and interdependent relationships in East Asian production linkage. With the development of globalization, Japanese downstream industry, such as manufacturing and especially the consumer electronics industry, is facing fierce competition from the catch-up phenomenon in South Korean, Taiwanese, and Chinese manufacturers. Many factories for Japanese consumer electronics firms have been forced to shut down. In addition, their suppliers, upstream Japanese firms like electronic component and equipment suppliers, have lost their business in the domestic Japanese market and have experienced pressure to enter global markets. With regard to the Japanese upstream industry and Taiwanese thin film transistor liquid crystal display (TFT-LCD) downstream firms, the Japanese electronic component and equipment suppliers have been integrated into the strategic production linkage in East Asian countries by way of responding to this transformation in competitive relationships in global TFT-LCD markets. Thus, they are increasingly abandoning Japanese clients to become the main electronic component and equipment suppliers for TFT-LCD manufacturers in Taiwan. In spite of the long-term recession in the Japanese economy and decay in the downstream industry, under the Japanese regulatory regime, Japanese upstream industry has thus far maintained its technological advantage in the global TFT-LCD markets and has continued to dominate the electronic component and equipment business for TFT-LCD manufacturers in Taiwan.

Transparency in an opaque market: Evaluative frictions between “thick” valuation and “thin” price data in the art market

This paper highlights the paradoxical effects of increased price data in markets with difficult-to-value products where non-price factors are highly relevant. In the fine art market, the growth of market information providers facilitated access to auction price data, beneficial in a market noted for its clandestine dealings. Drawing from inductive ethnographic research, the paper notes complex outcomes from increased data availability, as auction prices can be seen as an indicator of an artwork’s value. The findings deconstruct factors of supply, demand and multiple prices in the art market, highlighting important non-price factors in valuation, which complicate provider claims of art market transparency. Unpacking the process through which expert “thick” valuation transforms raw price data into comparables and then valuations helps to explain continuing differences in valuation, with buyers prone to understand past prices as market or reference prices, rather than raw materials for valuation that are adjusted for complexity. This contributes to an understanding of both advantages and predictable problems from increased price data in markets that contain substantial qualitative and non-numerical data, as evaluative frictions can occur even in the absence of clearly defined alternative valuation methods. This develops productive linkages between critical transparency and the valuation and evaluation research.

Shock Diffusion: Does Inter-Sectoral Network Structure Matter?

This paper introduces the concept of diffusion of shocks in a macroeconomic network consisting of inter-sectoral production linkages. I show that if sectors have different reaction horizons it would lead to diffusion of shocks through the network over time which prevents the inter-sectoral linkages to form the feedback loop structure essential to generate aggregate volatility. This result is different from other recent papers which have single period model with contemporaneous production linkages between different sectors thus generating sectoral shock amplification as one sector reacts to another contemporaneously resulting in bigger aggregate fluctuations. In contrast if sectors have different production horizons due to varying complexity of their production process or supply chain, it would break down the feedback architecture present in single period models. I further show that if the diffusion rate is varied for different sectors, the contribution of network structure to aggregate volatility can be insignificant. Also, it is no longer sufficient to characterize this contribution of inter-sectoral production network to aggregate volatility by just looking at input-output matrix or its summary statistics like degree distribution. The paper thus highlights the stark difference between the study of financial and inter-sectoral production networks because of the possibility of contemporaneous amplification and hence cascades in the case of financial networks. In the end, I propose lead time indicator as a possible proxy for measuring differential sectoral diffusion rates.

Análisis input-output de encadenamientos productivos y sectores clave en la economía mexicana

This article seeks to identify the industrial sectors that are key to the Mexican economy. To this end the following methodologies are employed, all based on input-output analysis: a) the Chenery-Watabane Method (1958) for calculating direct productive linkages; b) the Rasmussen Methods (1963) for calculating total productive linkages; c) Leontief’s demand focus (1985) for the quantification of direct and total backward linkages; and d) the supply focus of Ghosh (1958, 1968) used to quantify direct and total forward linkages. Finally, the results of the application of these methods shows that the key sectors of Mexico’s economy are intermediate goods and capital goods.