Backward Linkage

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

= Direct Backward Linkage

The proportion of intermediate consumption to the total output of the sector

$b_j = \sum_{i=1}^{n} a_{ij}$

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.

See Also

• Forward Linkage