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 it is measured as<ref>R.E. Miller and P.D. Blair, Input-Output Analysis: Foundations and Extensions, Second Edition, Cambridge University Press, 2009</ref> | |
| + | |||
| + | === Direct Backward Linkage == | ||
| + | The proportion of intermediate consumption to the total output of the sector | ||
| + | |||
| + | :<math> | ||
| + | b_j = \sum_{i=1}^{n} a_{ij} | ||
| + | </math> | ||
| + | |||
| + | === Total Backward Linkage === | ||
| + | The proportion of intermediate consumptionr to the total output requirement | ||
An industry has significant backward linkages when its production of output requires substantial intermediate inputs from many other industries.<ref>Concepts and Methods of the US Input-Output Accounts. K.J.Horowitz, M.A.Planting, 2009</ref> | An industry has significant backward linkages when its production of output requires substantial intermediate inputs from many other industries.<ref>Concepts and Methods of the US Input-Output Accounts. K.J.Horowitz, M.A.Planting, 2009</ref> | ||
Revision as of 15:30, 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 it is measured as[1]
= Direct Backward Linkage
The proportion of intermediate consumption to the total output of the sector
Total Backward Linkage
The proportion of intermediate consumptionr to the total output requirement
An industry has significant backward linkages when its production of output requires substantial intermediate inputs from many other industries.[2]
