Difference between revisions of "Backward Linkage"
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'''Backward Linkage''' captures the interconnection of an industry to other industries from which it purchases its inputs in order to produce its output. | '''Backward Linkage''' captures the interconnection of an industry to other industries from which it purchases its inputs in order to produce its output. | ||
− | In the simplest forms | + | In the simplest forms linkages are measured as summations of the appropriate IO matrix<ref>R.E. Miller and P.D. Blair, Input-Output Analysis: Foundations and Extensions, Second Edition, Cambridge University Press, 2009</ref> |
=== Direct Backward Linkage === | === Direct Backward Linkage === |
Revision as of 15:44, 16 November 2023
Contents
Definition
Backward Linkage captures the interconnection of an industry to other industries from which it purchases its inputs in order to produce its output.
In the simplest forms linkages are measured as summations of the appropriate IO matrix[1]
Direct Backward Linkage
The proportion of intermediate consumption to the total output of the sector. In terms of the Technical Coefficient Matrix this is expressed as the sum
Expressed in terms of transactions (Z, Input-Output Matrix not A) it captures the value of total intermediate inputs for a sector j as a proportion of the value of j’s total output.
Total Backward Linkage
The proportion of intermediate consumption to the total output requirement (capturing both direct and indirect linkages in an economy) can be expressed as the column sums of the total requirements matrix
An industry has significant backward linkages when its production of output requires substantial intermediate inputs from many other industries.[2]