Difference between revisions of "Backward Linkage"
Wiki admin (talk | contribs) |
Wiki admin (talk | contribs) |
||
| Line 5: | Line 5: | ||
=== Direct Backward Linkage === | === Direct Backward Linkage === | ||
| − | The proportion of intermediate consumption to the total output of the sector. In terms of the [[Technical Coefficient Matrix]] expressed as | + | 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 |
:<math> | :<math> | ||
b_j = \sum_{i=1}^{n} a_{ij} | b_j = \sum_{i=1}^{n} a_{ij} | ||
</math> | </math> | ||
| + | |||
| + | 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 === | === Total Backward Linkage === | ||
| − | The proportion of intermediate | + | 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 |
| + | |||
| + | :<math> | ||
| + | c_j = \sum_{i=1}^{n} l_{ij} | ||
| + | </math> | ||
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 15:42, 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. 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]
