Analysis of interindustry linkages for Bangladesh

Abstract

In the recent past It has generally been asserted that augmentation of key sectors plays an important role for economic development and a substantial part of resource allocation should be made in key sectors. Input-output analysis through the concept of linkages has plyed a significant part in planning the process of economic development. The present study evaluates the linkage concepts and identifies key sectors in the Bangladesh economy empirically. The present study uses a 47-sector input-output table of 1980 for distinguishing the degree of sectoral interdependencies. This work uses the intensity of interindustry linkage as an indicator of a sector's ability to spread growth impulse to its economic environment. Backward and forward linkages have been calculated and sectors have been categorised according to their total (direct and indirect) linkages. For computing forward linkages the output approach proposed by Jones has been adopted. The similarities of rank orderings of different linkage coefficients have been studied through Spearman's rank correlation. The mutual dependence of sectors is measured first by direct spread effects in terms of backward and forward linkages and then by Indirect effects by using inverse matrix. This study concludes with an assesment of the limitations of uses of linkages as indicators for key sectors and discusses possible extent ions of the present work. Show more