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Input-output structural decomposition analysis for Austria
Input-Output Structural Decomposition An for Austria Jiti Skolka, Austrian Institutefor Economic Research
The structural transformation of an economy, as represented, for example, by changes in the level and composition of net output value and of employment, raises questions about the sources of the shifts in the position of individual industries. Inpuroutput structural decomposition analysis can ascribe the source of these shifts to changes in technology, domestic final demand, foreign trade, and labor productivity. This method is explained in the first part of the paper, uld is applied to the analysis of changes in the Austrian economy between 1964 and 1976 in the second part. The analysis transforms the input-output table for the base year into the table for the terminal year on a step by step basis, i.e , through a set of cumulative comparative static adjustments in key parameters. The application indicates that shifts in net output vz&tieswere caused mainly by foreign trade and by changes in intermediate demand. Changes in employment were caused mainly by changes in domestic final demand and by changes in intermediate demand as well. Thus, the structure of net output value changed because of the international competitiveness of particular industries. The structure of employment changed because of differential productivity growth in finished goods industries. Changes in technology mattered in both cases.
1. INTRODUCTION The structural transformation of an economy is frequently studied in terms of changes in the level and composition of net output value, the level of employment, and the allocation of labour by industries. In Austria, between 1964 and 1976, net output value (gross domestic productless value-added tax) increased by 61.1 percent, and the number of economically active (self-employed and employed) persons by 0.3 percent. For individrral industries, however, the share of output and employment in the overall economy changed dramatically. The structural transformationof an economy raises many questions. Two of them are closely related to the picture presented here. The first is about the sources of the shifts in the position of individual industries; Address correspondence to Jill Skolka, Austrian Institute for Economic Research, P.O.B. A1103, Vienna, Austria. This articles is based in part on Skolka (1984) and Skolka (1985). The author wishes to render his thanks to Adam Rose and to an anonymous referee for valuable comments. Any errcrs are the sole responsibility of the author. Received January 1988; final draft accepted July 1988.
Journal of Policy Modeling I I ( I ):45-t% ( 1989) 0 Society for Policy Modeling, 1989
45 0161-8938189/$03.50
J. Skolka
46
and the second is about the role of economic policy. The answer to the first question can be found by applying input-output structural decomposition analysis. This approach reflects the logical struc=tureof the input-output model, and relates shifts in the levels and composition of net output value and employment to changes in the following domains: technology domestic final demand foreign trade labour productivity. The second question is more difficult to answer. Many structural changes are a consequence of both endogenous and exogenous economic forces. If these forces drive the economy in the wrong direction, governments implement counteracting measures. To distinguish exactly the effects of these forces on the one hand, and of governmental action on the other, is, however, extremely difficult. In the first part of this paper, structural decomposition analysis will be explained (a detailed description is given in the Appendix). In the second part, the results of a decomposition analysis for the Austrian economy between 1964 and 1976 will be presented.’ No attempt will be made to separate the effects of Austrian economic policy and of other exogenous influences. 2. INPUT-OUTPUT CHANGE
DECOMPOSITION
OF STRUCTURAL
Structural decomposition analysis can be defined as a method of distinguishing major shifts within an economy by means of comparative static changes in key sets of parameters (Rose and Miemyk 1988). Its origins date back to the work of Leontief (1941) on the structure of the U.S. economy. The basic methodology has been extended in several ways. Chenery et al. ( 1963) incorporated some elements of trade into the framework, and Carter ( 1960) added more explicit dynamic elements with a formal consider: !jon of the role of investment in embodied technical change. Still most of the contributions in this area have utilized a restricted
‘It would be tempting to carry out the input-output decomposition analysis of the structural change for a more recent period, and to compare the results with those presented in this paper. However, the input-output table for Austria for 1983 will not be published until 1989, and the existing 1976 table will not be repriced to the 1953 level until 1990.
X-O STRUCTURAL DECOMPOSITION ANALYS!S
4?
set of sources of change, and have not provided a formal ditivation of the methodology. In this section, we offer a step by step presentation of a set of stylized structural decomposition equations incorporating all major categories of change, and, in the course of the exposition, note several variants found in the literature.* In the Appendix, we derive an example of a more sophisticated set of equations to be used for empirical work, following an earlier study by the author (Skolka 19843. A. Basic Considerations Differences in the structure of an economy between two years (or structural differences between two countries) can be shown on production data (gross or net output values) and on employment data, both disaggregated by industries. For each industry, j, the difference between gross output values, the difference between net output values, and the difference between the number of economically active persons can be defined, respectively, as follows: hj = xi’ - $
(Ia)
Au, = vi’ - v; Alj = If - 1;
(Lb) (2)
where x;, X: = grossoutput value of
j ii. two different years (or countries), $‘, vj = net output value of industry j in two different years (or countries), li”, 1; = number of economically active persons in industry j in two different years (or countries). industry
The differences in output and employment levels and the structure of the whole economy can be depicted with the help of the input-output model. Its basic equation and solution are as follows: (I - A) X = Y U - A)-’ Y = X
Va) (3b)
where X = the column vector of gross output values, Y = the column vector of net final demand (i.e., imports), I = the unit (identity) matrix,
final demand minus
‘The pedagogical nature of the presentation stems in part from the lack of any review of the literature on the subject to date.
J. Skolka
48
A = the matrix of total input coefficients (computed Fromthe matrix of
domestic plus imported,intermediatetransactions). In equations (3a) and (3b), output is measured by gross output
values. If we , xpress, for all industries, the differences in gross output values between the base year, 0, and the current year, 1, by the inputoutput equation (3b), we can identify the two general categories of structural change that determine them: changes in the pattern of the final demand, Y, and changes in the input coefficients in the matrix, A. Both categories of impacts can be further disaggregated along three different lines: Ax = X’ -x”=(1
- A’)-’
Y - (1 - Ao)-’ Y” Y” + (1 - A’)-’ (Y’ - Y”) Y’ + (I -A“)-’ (Y’ - Y“) iri -A“)-‘] Y” + (1 - A”)-’ (Y’ - Yo) (Y’ - Y”) - (1 - AO)-‘]
AX = [(l - A’)-’ - (1 - AO)-‘1 ,\‘j-’ - (1 - A?-‘] Ax = [(I Ax
= [(i
+ [(1 -
(4) (3 (6)
(7)
In the first case, the differences in the inverse matrices of input coefficients are weighted with the base year’s final demand, and the differences of final demand with the inverse of the current year’s input coefficient matrix.3 In the second case, the differences in the inverse input coefficient matrices are weighted with the current year’s final demand, and tne differences of final demand with the inverse of the base year’s input coefficient matrix.4 In comparisons over time, an analogy exists between the equations (5) and (6) and the Laspeyres and Paasche index formulae.5 In inter-country comparisons, equations (5) and (4) are equivalent (Balassa 1979, Fay and Fink 1976), but equation (7), which avoids the choice of weighting, can be also used. The differences in final demand and the differences in the inverse matrices are multiplied with the base year’s weights, and the joint effect of both differences is shown separately (Watanabe 1964; 1969). B. Sources of Structural Change In the three transformations of equation (4), the shifts in the structure and level of gross output are explained by changes in final demand
-is approach was applied by Chenery, Shishido and Watanabe (1962), Staeglin and Wessels (1972). Syrquin (1976). Weiss and Wessels (1981), Kubo and Robinson (19841, Fukasaku (1984), and Skolka (1984, 1985). ?his solution was used by Skolka (1975, 1977. 1979), by Nijhowne et al. (1984). and by Rose and Chen (1987). ‘See also Fromm’s (1968) comment on Vaccara and Simon (1968’ and Syrquin (1976).
1-O STRUCTURAL DiTOMF’OSlTION ANALYSIS
49
and by changes m input coefficients. These factors alone, however, cannot explain the shifts in net output values. Economic growth, the composition of final demand, the value-added shares, and import dependence have to be considered, too. Shifts in employment are affkcted also by diffe-rices in productivity growth rates by industries. Economic growth does not, by itself, cause any structural changes in a linear model. Its impact on the changes in the levels of output and of employment must be separated from the influences of the production technology and of the pattern of domestic final demand. The solution i: obtained rather easily if equation (4) is changed as follows: Ax=x’-
2X0
W
Structural shifts can be depicted by deviations of the act4 increases of the gross output values of individual industries from levels corresponding to the growth rate of the whole economy. This growth rate
can, however, be defined in three different ways:” 2,
Y’ -
M'
Y0 -
M”
=
Y’ 22 =
-
2,
-o
P
(&a)
@W
X'
=
X
where Y = toti demand, total imports, x= total gross output value.
M= Jn
the input-output tables, total final demand is split into several components, the effects of which can be accounted separately. The simplest approach is to distinguish between domestic final demand and exports7:
6EQuation(8a) was used by Chenety, Shishido and Watanabe ( 1962). Morley and Smith (!970), Syrquin ( 1976), Balassa ( 1979) and Nijhowne et al. ( 19841. Fduation (8b) ‘*‘asapplied by Skolka (1975, 1977, 1979, 1984, 1985) and Rose and Chen (1987). Equation (I(c) was used by Kubo and Robinson (1984). Other more sophisticated measures of economic growth have been used (see, e.g., Leontief and Ford 1972). ‘Chenery, Shishido and Watanabe (1962), Syrquin (1976), Balassa ( 1979), Kubo and Robinson (1984), and Torii and Fukasaku (1984). In a more sophisticated approach, several authors consider the changing weights of various
50
J. Skolka
Y =D-rE
(9
the volume and structure of output measured by net output values (see equation lb), changes in the value-added shares must be considered, too. These shares (in the gross output values) are defined as: n such that x a,j + ad = 1 Wa) % = lTr, In
4
i=,
where v, = net output value in industry j, n = number of industries.
The difkrence in. value-added between two periods can accordingly be expressed *as:
In turning from gross output values to net output values, two different
weightings analogous to equations (5) and (6) can be used. The development of labour productivity co-determines the shifts in the level and structure of the economically active persons (see equation 2). Labour productivity is measured by net labour input coefficients: li
a,, = vj
(1 la)
where Ii = number of economically active persons in industry j.
The difference in the number of economically active persons between years 0 and 1 equals: A lj = alj v; - ayj vy
(1 lb)
Again, as with equations (5) and (6), and with equations (13) and (14), two weightings can be applied. Import dependence and its changes can be defined either in a descriptive way, which only note the change in the import dependence; or in a normative way, which applies certain criteria to that change (Desai 1969; Fane 1973). In input-output structural decomposition
omestic final demand. See Skolka (1975, 1977, 1979, 1984, 1985). Weiss and Wessels (1980, 1981), Nijhowne et al. (1984), and in inter-country comparisons, Fay and Fink (1976).
I-O STRUCTURAL DECOMPOSITION ANALYSIS
51
analysis, four measures of changes in import dependence have been utilized. The deviations of import growth rates in industries from the growth rate of the domestic demand measure the import substitution in the “traditional” way (Balassa 1979). The growth of the gross domestic product is the measure of economic growth (Johnson 1959); deviations of import growth rates in industries measure import substitution (Chenery et al. 1962): Ax,
= (1 - A)-’
AM
AM=M'-zM"
(Qa)
(12W
where AX,,, = changes in the vector of the gross output values caused by import substitution M'M' = column vector of imports (classified by supplying industries) in the years 1 and 0, respectively.
Industry specific import quotients depict the changes in of the import dependence. These coefficients can be conceived in different v~ays:~ w,
=-
wi
m, x, - ei
*z--f m-
Wa) (136)
xi
W$
=
-
%
Yi - e,
(13c’r
where rn? = total imports of industry i. xi = total intermediate transactions of industry i.
m,* = imported intermediate transactions of industry i. m,/ = direct imports of industry i for final demand. ej = exports of industry i.
Only the matrix of imported transactions allows us to assess the
‘Nijhowne et al. ( 1984), Kanemitsu and Ohnkbi ( 1986), and Pal ( 1987), used the ratios of imports to domestic demand (gross output value minus exports), as defined by the equation (19a). Kubo and Robinson (1984) wed ratios oft Jmestic production to domestic demand, i.e., equation (la). Torii and Fukasaku (1984) used tv+o import quotients. according to the equations (13b) and (13~).
3.
52
Skolka
import dependence pre&ely .’ Matrices of input coefficients for the domestic and for the imported transactions can be calculated as follows: lo
(144
ai = af: + a:
The coeffients at and a$?can also be defined as products of the “share coefficients” $j and 4 and of the total input coefficients (which can be computed from matrices of total transactions, i.e., domestic plus imported transactions: af3 = a$$
W-4
a: = a$$
(15b)
3. INPUT-OUTPUT STRUCTURAL ANALYSIS #‘OR AUSTRIA
DECOMPOSITION
In the investigation of the changes in the levels and structures of net output and employment in Austria between 1964 and 1976, the elements presented above were combined as follows: 1. The matrices of intermediate and final demand were weighted
according to equation (5). 2. Economic growth was measured by the growth of total final
demand, following equation (8b). 3. Exports and domestic final demand were dealt with separately, following equation (9). 4. Shifts in the weights of final demand components and shifts in their commodity composition were both considered. ‘This approach reveals, inter alia. that the rates of growth of imports or the import quotients can also change due to alterations in technology and in final demand. “Dahl\ 1970) was the first to propose the use of import input coefficients for the investigation of changes in the import Dependence (in 1976 Syrquin arrived at the same solution). These coefficients were first used empirically by Skolka (1975) and Fay and Fink (1976).
I-O STRUCTURALDECOMPOSITIONANALYSIS
53
Table 1: Final Arrangementof the Steps in The Structural Decomposition Analysis’ Difference of Type of structural
change
1. Growth of domestic final demand 2. Productivitygrowth 3. Changes in technology Intermediateinputs Value added shares 4. Changes in domestic final demand Commoditycomposition of final demand components Weights of final demandcomponents 5. Changes in exports Contributionof exports to the growth of total final demand Commoditycomposition of exports Share of exports in total final demand 6. Changes in importdependence Intermediateimports Direct imports for final demand
computationd
steps
IaX-IX III-II IX-VIII VI-IV V-IV VI-V I-Ia ‘VII-VI VIII-VII II-I IV-III
“The effects I and 2 combined give the net effect of final demand and productivity growth; 5 and 6 combined give the net effect of changes in foreign trade.
5. Changes in import dependence were accounted for in each cell of the input-output table, following equations (14) and (15). The input-output structural decomposition analysis was carried out as a step-by-step transition from matrices, vectors, and scalars of the input-output table for 1964 (i.e., for the year 0) to those of the inputoutput table for the year 1976 (i.e., the year 1). The formulae associated with each step are given in the Appendix. The results of the calculations were rearranged into more homogeneous groups and are presented in Table 1. This approach is one of many possibilities; a unique, or ‘ ‘optimal, ’ ’ solution to the structural decomposition problem has not yet been derived. Its advantages are the fine level of disaggregation and the additivity of the partial effects. Its disadvantage is the influence of the sequence of the analytical steps on the size of the partial effects. A. The Macro-econo The Austrian input-output tables analysis, are valued at 1976 table at 1964 prices (QeStZ 1973) was supplemented by the matrix of
J. Skolka
54
imported transactions and repriced to the 1976 level (Holub, Richter and Schwarzl 1984). A version of the 1976 input-output table, compatible with the 1964 table, was compiled from raw input-output statistics prior to the publication of the official 1976 table (Richter 1981). Both input-output tables were aggregated to the 19 industry level in a manner consistent with the Austrian National Accounts. A comparison of data in the input-output tables for 1964 and 1976 reveals the structural cbpages in the Austrian economy between 1964 and 1976, which have to be considered in the input-output structural decomposition analysis. 1. Economic growth: Between 1964 and 1976, domestic final demand increased in real terms by 65.6 percent, and total final demand rose by 74.8 percent. The difference of both rates was due to the very fast growth of exports. 2. Changes of technology: In the input-output model, changes in technology cause shifts in the input coefficients and, in each column, complementary shifts in the value added shares. The reason are as follows: 0 Substitution of intermediate inputs: certain raw materials and half made products are substituted by others. * Changes in division of labour: parts and semi-finished products produced by certain establishments are externalized and purchased from other establishments. Changes in the composition of output: innovations, shifts in relative prices and changing demand affect the “output mix” of the industries. In Austria, between 1964 and 1976, the significant substitution effects were the increasing intermediate demand on products of chemical and petroleum industries and of electricity and water supply, and declining intermediate demand on products of mining, agriculture, and forestry and other services. The division of labour was intensified; among and also within industries, most intra-industry transactions increased. The product mix of the manufacturing and service industries was adjusted to the changing demand. 3. Changes in domestic final demand: Between 1964 and 1976, the share of public consumption remained stable, while the share of private consumption declined in favour of gross fixed capital formation and tourist expenditures. The commodity composition of the final demand components (in real terms) also changed as follows: l
I-O STRUCTURAL DECOMF’OSITIONANALYSIS
55
In private consumption, the share of agriculture and food products declined, and the share of petroleum refining and metal products increased. 0 In public consumption, the share of public services (expenditure on staff in real terms) declined and the share of purchases of goods increased. In gross capital formation, the share of construction increased, and the share of metal products declined. In tourists’ expenditures, the share of restaurant and hotel services declined and the share of purchases of goods increased. 4. Changes in foreign trade: The share of exports in total final demand increased from 14.9 percent in 1964 to 19.4 percent in 1976. The commodity composition of exports shifted in favour of chemicals and metal products; basic metals and mining lost shares. Intermediate imports of textiles, paper and paper products, and base metals expanded at the expense of the demand on domestic products. In final demand, import penetration was strong in private consumption (chemicals, textiles, wood and wood products) and in gross fixed capital formation (metal products). 5. Labour productivity: As in other industrial countries, labour productivity was growing fast in the goods producing sector (in particular in agriculture and in the textile industry), and was stagnating in the service sector (in particular in the public administration). l
l
l
B. Results of the Calculations for Austria, 19644976 In Austria; between 1964 and 1976, the growth of final demand, and the structural shifts described above, caused shifts in the levels and structures of net output value and in the allocation of labour by industries (Table 2). In 1964,3,2 10.7 thousand persons were employed in Austria; these persons produced net output value of 409.9 billion Austrian Shillings (AS). Between 1964 and 1976, total final demand increased by 65.6 percent. Had there been no structural changes in the economy, all entries of the 1964 input-output table would have increased by that rate, as would have the net output value (283.9 billion AS), and employment (2,223.9 thousand persons). In fact, the actual increases were 250.3 billion AS for net output value and 9.7 thousand persons for employment (see Table 2). A large part of the difference between the hypothetical and actual increases in the employment, i.e.,
12.9 17.8 71.1 21.2 59.3 87.5 19.4 35.4 60.3 35.9 92.3
8.5 7.5 38.0
10.6 40.0 51.3 15.1
19.6 24.4 32.6 62.7 660.3
19.0 12.2
7.3 6.5
409.9
13.9
11.3
Total economy
36.0 4.0 29.8 17.7 14.5
30.9 4.8 19.7 11.7 7.5
Agriculture and forestry Mining Food, beverages Textiles, leather Wood products Paper, paper products Chemical (exe . petroleum products) Petroleum products Pottery, china glassware Basic metals Metal products Electricity, water supply Construction Trade Restaurants, hotels Transport, communications Financial services Other services Public administration
1976
I!364
Industries
Net Output (Billion AS)
250.4
15.8 35.9 3.3 29.6
10.7 19.3 36.2 4.4
4.3 10.3 33.0
11.7 5.7
2.7
5.1 -0.8 10.1 6.0 7.0
Absolute
61.1
80.5 147.0 10.1 47.2
100.9 48.4 70.6 29.1
50.8 138.8 86.9
160.1 88.0
235
16.4 - 16.9 51.4 51.3 93.9
ln percent
Difference WC64
Table 2: Net Output and Employment by Industries: 1964 and 1976
3,210.7
197.2 119.9 116.2 359.4
27.8 265.3 355.6 120.3
57.4 65.0 294.7
56.4 9.7
70.9
617.1 30.8 134.8 212.0 100.2
1964
3,220 4
211.9 185.3 97.9 527.6
32.1 269.2 408.7 148.4
49.6 66.4 347.2
72.2 8.6
67.1
343.0 17.1 122.9 149.2 96.0
1976
Employment (Thousand Persons)
+9.7
+ 14.7 +65.4 - 18.3 + 168.2
+4.3 +3.9 +53.1 +28.1
-7.8 + 1.4 + 52.5
+ 15.8 -1.1
-3.8
- 274. I - 13.7 -11.9 -62.8 -4.2
Absolute
+0.3
+7.5 + 54.5 - 15.7 +46.8
+ 15.5 +1.5 + 14.9 +23.4
- 13.6 +2.2 + 17.8
+ 28.0 -11.3
-5.4
-44.4 -44.5 -8.8 - 29.6 -4.2
bl percent
Difference 1976-64
I-O STRUCTURAL DECOMPOSITION ANALYSIS
57
1,995.5 thousand persons, was due to the productivity growth. The rest, i.e., 2 18.7 thousand persons, as well as the difference between the actual and hypothetical increases in net output values, i.e., 33.6 billion AS, can be, with the help of input-output structural decomposition analysis, attributed to various structural changes. Changes in technology caused a decrease in net output value of 8.9 billion AS and in employment of 73.9 thousand persons. The positive effect of chaqges in intermediate inputs, i.e., plus 16.8 billion AS net output value and plus 24.2 thousand persons, was smaller than the negative effect of the changes in value added shares (minus 25.7 billion AS net output value) and minus 98.1 thousand employed persons. Changes in domestic final demand caused a decline in net output value of 6.0 billion AS and in employment of 101.1 thousand persons. The shifts in the weights of final demand components caused small increases of 0.3 billion AS net output value and in employment of 4.7 thousand persons. The changes in the commodity composition of the final demand components caused a decline in net output value of 6.3 billion AS and in employment of 105.8 thousand persons. Changes in exports had a positive effect of 22.8 billion AS net output value and 183.1 thousand employed persons. The effect of tte difference between the faster growth of exports and the slower growth of total final demand was overwhelming: 22.8 billion AS net output value and 179.2 thousand employed persons. Changes in the commodity composition of exports had tiny positive effects of 0.6 billion AS net output value and of 2.2 thousand employed persons. The increase of the share of exports in total final demand had a similarly weak effect of minus 0.6 billion AS net output value and of plus 1.8 thousand employed persons. Changes in the import dependence caused a decline in net output value of41.5 billion AS and in employment of 226.7 thousand persons. Three quarters of both losses could be allocated to higher imports for final demand (mainly for private consumption and for gross fixed investments). The total effect of changes in foreign trade (i.e., the balance of the positive effects of exports and negative effects of imports) amounted a loss of 18.7 billion AS net output value and of 43.6 thousand employed persons. A table similar to Table 3 could be constructed for each of the 19 industries. Such large tables would not unly require excessive space, but the mass of data could hide the truly important facts. The results will be summari omogeneous groups of in for the formatio e groups are the r2sitive
i. Sko!ka
58
Table 3: Structural Decomposition of the Differences in the Net Output and Employment Levels between 1964 and 1976 Net Output
Levels, Differences and
Compownts
of StructuA Change
Row
(IMlion AS)
Employment (tbouspads)
Actual level: 1964 1976 Difference: 1976-64
1 2 3(2 - 1)
z*; 250:4
3 210.7 3 220.4 9.7
Hypothetical value 1976 Hypothetical increase A 1976-64
4 S(4 - 1)
693.9 283.9
5 434.6 2 223.9
Impact of labor productivity Hypothetical increase B 1976-64 A Difference between the actual B and hypothetical increase
6 7(5 -6) 8(3-7) 8(3-4)
- 33.6
- 1 995.5 228.4 -218.7 -
Cbges in technology: MeTmediate inputs Value added shares
9(10+ 11) 10 11
-8.9 + 16.8 -25.7
-73.9 + 24.2 -98.1
Changes in domestic final demand Commodity composition Weights of components
12(13+ 14)
-6.0
- 101.1
13 14
-6.3 i-o.3
- 105.8 +4.7
Changes in exports Faster growth of exports Commodity composition Weight of exports
15(16+ 17+ 18) 16 17 18
+ 22.8 + 22.8 + 0.6 -0.6
+ 183.1 + 179.2 + 2.2 +I.8
Changes in import dependence Intermediate imports Final demand
19(20+ 21) 20 21
-41.5 - 10.9 - 30.6
- 226.7 - 50.0 - 176.7
Total effect of domestic factors Total effect of foreign trade
22(9 + 12) 23(15+ 19)
- 14.9 - 18.7
- 175.0 -43.6
tions from the development of the following indicators for the whole economy: 1. The average rate of productivity growth. 2. The impact of structural shifts both on the net output values and employment. 3. The hypothetical development of the employment, corresponding to the increase in total domestic demand and the average ~rod~lctivity growth in the economy. The homogeneocs groups will be described by ( + ) and ( - ) signs. y a combination ( - ivided into the following six groups:
I-O STRUCTURAL DECOMPOSITION ANALYSIS
(-
59
- - ) Agriculture and forestry; Food, beverages and tobacco;
((+ (-
+ - ) - - ) + +)
(+
-
+)
Textiles, wearing apparel, leather; Pottery, china, glassware. Petroleum and petroleum products; Other services. Mining; Paper, paper products; Other services. Chemicals; Basic metals; Metal products, machinery, equipment; Electricity and water supply; Transport and ccmmunications; Financial services. Construction; Restaurants and hotels; Public administration.
Only four industries out of 19 followed the pattern of the change in the whole economy. The impact of productivity growth was negative in 12 industries, although the impact of the structural shifts was negative in 10 industries. The combined effect of both was negative in nine industries only; positive effects were more frequently larger than the negative ones. 5. CONCLUSIONS The input-output structural decomposition analysis of the changes in the levels and structures of net output value and employment in Austria between 1964 and 1976 shows, at the highest level of aggregation, a divergence between the development of net output value on the one hand and development of employment on the other. The actual increases in total net output value as well as in employment were lower than the hypothetical ones (i.e., under the assumption of no structural transformation). The relative difference in the number of employed of - 6.8 percent was greater than th: relative difference in the level of net output value of - 5.1 percent. The relative weights of various structural effects differed profoundly as expressed in percentages of the total change. 1. Net output values: the impact of foreign trade prevailed with a weight of 55.6 percent; the weight of the domestic demand .4 percent, composed of 26.4 percent of the impact of was the changes in technology (in the intermediate demand) and 18.0 percent of the impact of the changes in the domestic final demand. 2. Employment: the impact of the fo estic factors percent. percent; the weight of the changes in the technology was 33.8
60
J.
percent, and the weight of the changes in the domestic final demand was 46.3 percent. In Austria, between 1964 and 1976, the shifts in net output values were caused mainly by foreign trade, and also by changes in intermediate demand. Shifts in employment were caused mainly by changes in the domestic final demand (industries delivering to domestic final demand had very different productivity development), and also by changes in intermediate demand. The answer to the question “Why does the structure of net output value change?” should be sought in the competitiveness of particular industries. The answer to the question ‘Why does the structure of employment change?” should be sought in the differential productivity growth in industries delivering to domestic final demand. Technology (intermediate demand) matters in both cases. Two other aspects of the structural transformation between I964 and 1976 are import substitution and international division of labour. The changes in the net output values and employment are consequences of the “pure” negative import substitution (i.e., imports substituting for domestic production within each of the 19 industries, not balanced by an increase in exports). Import substitution in a “wider sense”, i.e., shifts in demand to products where a greater share is imported (e.g., a switch of private consumption from foods, mainly produced in Austria, to predominantly imported petroleum products and metal products, such as motor cars), cannot be captured so easily. It is mixed with consequences of the shift in den;.aid from products with a high labour intensity to products with low labour intensity. The penetration of imported products on the Austrian domestic market, and a parallel increase in the exports, result from a more intensive intemationd division of labour. Changes in both exports and imports are large, but tend to balance each other. For example, in the metal products, machinery and equipment industry there is a small positive total effect of changes in foreign trade of 6.3 thousand persons, which is the balance of the positive impact of exports of 56.9 thousand persons and of the negative impact of imports of 50.6 thousand persons. Paralleling the increase in international division of labour, also the domestic division of labour intensified in Austria between 1964 and 1976. This change emerges in the input-output structural decomposition analysis as considerable negative effects of the changes in value on AS net output value and of 98.1 ges in
I-O STRUCTURAL DECO
SrrION
LYSIS
The following detailed description of the decom a continuation of Section 2 of this
sition andtysis
SUPPLEMENTARY VARIABLES FOR THE INPUT~~~~~~
THE INTERDEPENDENCE OF STRUCT
CHANGE
ables are still required for the analytical approach:
ematical
ANALYSIS
is
OF
The fo! aviation
SHAREOFEXPORTSANDSHAREOFDOMESTICFINALDEMANDINTOTAL HNAL DEMAND E
c, = Y
(16b)
where E = exports Y = total final demand.
SHAREOFDOMESTICMNALDEMANDIN
TOTALFINALDEMAND
D c, = Y
(1W
where D=
domestic final demand
SHAREOFDDMESTICFINALDEMANDCOMPONENTKINDOMESTICFINAL DEMAND c,
YA D
= -
(1W
where Y, = component k of domestic final demand
These shares are elements of a vector of the composition of domestic final demand: Cd = kA-
The composition of total final de and is given as a ro C’ = [Cd.c,l
J.
62
Skolka
To measure import substitution in intermediate transactions, four matrixes of input coefficients of domestic transactions A D.o = [ay * sp,:q,
WW
AD. I
WW
=
[cl;;’
- sfy],
A a”O = [a;’ . CO],
W3c)
A a”” = [ayJ * g ‘1.
WW
first two are matrixes of the actual coefficients of the years 0 and 1, in the other two matrixes we convert the total input coefficients of the respective year with the shares of domestic output of the alternate year into hypothetical coefficients of domestic transactions. Demand structure coefficients are defined for the individual final demand components:
The
b,
=
$
WW
k
where :
Yik
=
total delivery {i.e., domestic output and direct imports) of industry i for final demand component k.
In each delivery for domestic final demand a distinction can be made between domestic output and direct imports. In exports it is assumed that there are no direct imports (i.e., re-exports). For domestic final demand, too, share coefficients can be defined: Wb)
where $=
shoe of domestic output in total delivery of industry i to domestic final demand component k.
We can now define four matrixes of structure of domestic deliveries for domestic final demand: (2W B ;,’ = [b;’ . e’], e”O
= [b;’
g.0’1
=
[by
GObI
G”l,
(2(k)
- s-p].
(204
-
n com?~tat~o~s concerning exports we use symbols BFSOand BF-’
I-OSTRUCTURALDECOMPOSITIONANALYSIS
designating the export structure respectively.
63
vectors in thr: JWI-s 0 and 1
THEINTERDEPENDENCEOFSTRUCTURALCHANGE~ Inprinciple,the analysis of the interdependence of structural change!: follows equation (5). On the right hand side of this equation, the combinations of matrixes, vectors, and scalars X0 = (I - A”*~-‘[B~~(l
- c> + B:“c~y”
(2W
respectively X’ = (I - AD*‘)-‘[B:’ C; ( 1 - c;)+ B;’ c:]y’
(2Jb)
allow to reconstruct the calculations of the actual vectors of gross output from the actual input-output tables of the years 0 to 1 respectively. The “anatomy” of interdependence of structural changes according to equation (5) is carried out as a step-by-step transition from matrixes, vectors, and scalars of the year 0 to the year 1. In this transition the difference of the effects of the level of total final demand and of domestic final demand is recorded separately. The step I of computations for year 0 corresponds to the following equation: X = (1 - AD”‘)-‘[e” c (1 - c3 + f3f.Oc3y’.
(22)
The value of y’ is a scalar, defined as z y”; c, is a scalar. z is the increase in total final demand between 0 to 1. The growth of total final demand reflects the growth of domestic final demand on the one hand and the growth of exports on the other. Since the two usually grow at different rates, an intermediate step (la) is interposed. In the first instance growth of domestic demand only, ?, is considered, and the difference between the level of gross output that accords with this growth, and the level that results from equation (23, is interpreted as export growth effect. Following equation (5) a transition is made in two steps from one to the other matrix of the input coefficients. In the step II, the total input coefficients remain constant, while the shares of domestic deliveries 4 are changed. Equation (18d) is applied to establish the effect of import substitution in the intermediate transactions: l
Xl’
=
(I
-
A,.“‘)- ’ [fl:” c”d1 - c;) + BF” cny'
(23)
In the next step (III) the matrix of the input coefficient consistent in time with final demand is introduced. n this way the effect of input coefficient changes is taken fully into account:
J. Skolka
64
&I =
(I - AD*‘)-
’ [f$” C’f# - cf) + f8f.Oc3y’
(24)
With these two steps the transition from year 0 to year 1 on the right hand side of equation (5) is completed. On the left we start with the changes of the structure coefficients bik. Equation (20d) is used in the step IV to allow for import substitution in domestic final demand: =
Xl”
AD*‘)-’ [e”
-
(I
(?A1 - c3 + BF” c3y’
(25)
Next (step V) follows the change in commodity composition of the domestic final demand components: X” = (Z - A”.‘)-’ [@f’ c”J1 - c:) + v
~3,’
(26)
and (step VI) in the shares (weights) of the components in domestic final demand: Y*VI =
(I
AD*‘)-’
_
[_fj’
c# -- c:, f
8f.O c;ly’
(27)
Tn the last two steps the structural effects of the exports are taken into account. First (step VII) the consequences of changes in the commodity composition of expqrts XVi’
=
::I
-
AD.‘)-’
[e’
CXI - c:) + B,D”cay’
mv
and in step VIII, oompleting the chain, the change in the relation between exports anc;idomestic final demand is allowed for: ”Y VIII
=
:(I
-
A,.‘)-’ [@” Cxl
- c:) + Bf” c;]y’
(2%
Transition from gro& to net output values and to the number of economically active persons follows. In step IX we apply a base year weighting version of the net value equation. In the final step X, a base year version of the labour productivity equation is applied.
Balassa. B. (1979) Accounting for Economic Growth: The Case of Norway, Oxford Economic Papers 41(3),
d.15-436.
A. (1960) Srrucrural Ckznge in the i,mrk.vz Economy, Cambridge: Harvard University Press. Chenery, H.B. (1960) Patterns of Industrial Growth, American Economic Review 50(2), 624-
Carter,
654.
Chenery, H.B., Shkhido, S., and Watanabe, T. (1963) The Pattern of Japanese Growth, 19141954, Econolmetriid 30( 1), 98- 139. Dahl, H.E. (1970) l.mport Substitution vs. Other Sources of Coefficient Change in Input-Output Models, Mimeo, Chr. Michelson Institute, Bergen. Desai, P. (1969) Ahemativ~ Mensures of Import Substitution, O.@ord Economic Papers 21(3) 312-324.
Fane, 6. (1973) Consistent Measures of Import Substitution, Economica 25(2), 251-263.
I-O STRUCTURAL DECOMPOSITION ANALYSIS
65
Fay, J. and Fink, G. (1976) Ein Input-Output-Vergleich der Bmtto-Produktionsstr&ur nach Wirtschaftsbereichen zwischen Osterreich und Ungam. Wiener lnstitut fuer Intemationale Wirtschaftsvergleiche, Vienna. Feldman, S., McClain, D.. and Palmer, K. (1987) Sources of Structural Change in the United States, 1963-78: An Input-Output Perspective, The Review of Economics and Statistics 69(3), 503410.
Fromm, G. (1968) Comment on Vaccara and Simon. In The Industrial Composition of Income and Product (J.W. Kendrick, Ed.). New York: Columbia University Press, pp. 19-66. Holub, H.W., Richter, J., and Schwarzl, R. (1984) Reale Input-Output-Tabelle fuer Osterreich 1964, zu Preisen 1976, Innsbruck University, Innsbruck. Johnson, H.G. (1959) Economic Develcpment and International Trade, Natiunaloekonomisk TidsskrijI 56.253-272. Kanemistsu, H. and Ohnishi, H. (1988) An input-Output Analysis of Technological Change in the Japanese Economy. In Frontiers of Input-Output Anafysis (R. Miller, K. Polenske and A. Rose, Eds.). New York: Oxford University Ptess. Kubo, Y. and Robinson, S. (1984) Sources of industrial Growth and Structural Change. A Comparative Analysis of Eight Countries, Proceedings of the Seventh International Conference on Input-Output Techniques, United Nations, New York, pp. 233-254. Leontief, W. (1941) The Structure of the American Economy. New York: Oxford University Press. Eeontief, W., and Ford, D. (1972) Air Pollution and the Economic Structure: Empirical Results of Input-Output Computations. In Input-Output Techniques (A. Brody and A.P. Carter, Eds.). Amsterdamz North-Holland. Morley, S.A., and Smith, G.W. (1970) On the MeasTrcment of Import Substitution, American Economic Review 60(4), 728-735. Nijhowne, S., Gribble, S., Hamilton, K., and Syed, A. (1984) Structural Change in the Canadian Economy 1961-1971, Proceedings of the Seventh International Conference on lnputOutput Techniques, United Nations. New York, pp. 297-332. (OstZ) Ostetreichisches Statistisches Zentralamt, (1973) Bundeskammer der gewerblichen Wirtschaft, Osterreichisches Institut fuer Wirtschaftsforschung, (1973) Input-Output-Tabelle 1964, Vienna. Pal, D.P. (1986) Import Substitution and Changes in Structural Interdependence: A D~omposition Analysis, Eighth International Conference on Input-Output Techaiques, Sapporo, Japan. Richter, J. (198 I) Strukturen and Interdependenzen der Oesterreichischen Wirtschaft-Ergebnisse der Provisorischen Input-Output-Tahelle 1976, bundeskammer der gewerbiichen Winschaft, Vienna. Rose, A., and Chen, C.Y. (1987) Sources of Change in Energy Use in the U.S. Economy, 1972-1982, Regional Research Institute, West Virginia University. Rose, A., and W. Miermyk (1989) Input-Output Analysis: The First Fifty Years. Economic Sys?ems Research (forthcoming). Skolka, J. (1977) Input-Output Anatomy Of Import Elasticities, Empirical Economics 2(3), 123136. -. (1984) Input-Output Anatomy of Changes in Employment Structure in Austria between 1964 and 1976, Empirica (Austrian Economic Papers) I l(2). 2(35-233. (1985) Produktion, Beschaeftigung und Strukturwandel in Osterreich, Wirfschq$tspof-. itsche Blaetter 32(5), 290-330. Staeglin, R., and Wessels, H. (1972) Intertemporal Analysis of Structural Change in the German Economy. In Input-Output Techniqzs (A. Brady and A.3. Carter, Eds.) Amsterdam: North-Holland, pp. 370-392.
66
J. Skolka
Syrquin, M. (1976) Sources of Industrial Growth and Change-An Alternative Measure. Mimeo, European Meeting of the Econometric Society, Helsinki. Torii, Y., and Fukasatu, K. (1984) Economic Development and Changes in Linkage Structure: An Input-Output Analysis of the Republic of Korea and Japan, Froceedings of the Seventh International Conference on Input-Output Techniques, United Nations, New York. Vaccara, B., and Simon, N. (1968) Factors Affecting the Postwar Composition of Real Product. In The Industrial Composition of Income and Product (J.W. Kendrick, Ed.). New York: Columbia University Press, pp. 19-66. Watanabe, ‘I. (1964) An Experimental Comparison of production Structures: EEC Countries and Japan, Weftwirtsclrofrliches Archiv 92( 11, 409-425. -. (1969) Approaches to the Ptobiem of Intercountry Comparison of Input-Output Relations. A Survey and Suggestions for Further Research, in United Nations, International Comparisons of Interindustry Data, New York, pp, 187-201. Weiss, J.P., and Wessels, H. (1980) Strukturanalyse der Prod&ions-und der Beschacftigungsentwicklung in der Bundestepublik Deutschland 1962 bis 1972. In Empirische Wirtschafl~orschwtg-Konzeptionen. Verjdtren und Ergebnkse Berlin, pp. 153-170. -. (1981) Komponentenzerlegung der Prod&ions und Beschaeftigungseffekte von Veraendenmgen der Nachfrage und der Produktionskoeffizienten. In Deutsches Institut fuer Wirtschaftsforschung, Abschwachung der Wachstumsimpulse (Analyse der strukturellen Entwicklung der Deutschen Wirtschaft), Materialband I zur Strukturberiechterstattung 1980, Berlin.
The structural transformation of an economy, as represented, for example, by changes in the level and composition of net output value and of employment, raises questions about the sources of the shifts in the position of individual industries. Inpuroutput structural decomposition analysis can ascribe the source of these shifts to changes in technology, domestic final demand, foreign trade, and labor productivity. This method is explained in the first part of the paper, uld is applied to the analysis of changes in the Austrian economy between 1964 and 1976 in the second part. The analysis transforms the input-output table for the base year into the table for the terminal year on a step by step basis, i.e , through a set of cumulative comparative static adjustments in key parameters. The application indicates that shifts in net output vz&tieswere caused mainly by foreign trade and by changes in intermediate demand. Changes in employment were caused mainly by changes in domestic final demand and by changes in intermediate demand as well. Thus, the structure of net output value changed because of the international competitiveness of particular industries. The structure of employment changed because of differential productivity growth in finished goods industries. Changes in technology mattered in both cases.
1. INTRODUCTION The structural transformation of an economy is frequently studied in terms of changes in the level and composition of net output value, the level of employment, and the allocation of labour by industries. In Austria, between 1964 and 1976, net output value (gross domestic productless value-added tax) increased by 61.1 percent, and the number of economically active (self-employed and employed) persons by 0.3 percent. For individrral industries, however, the share of output and employment in the overall economy changed dramatically. The structural transformationof an economy raises many questions. Two of them are closely related to the picture presented here. The first is about the sources of the shifts in the position of individual industries; Address correspondence to Jill Skolka, Austrian Institute for Economic Research, P.O.B. A1103, Vienna, Austria. This articles is based in part on Skolka (1984) and Skolka (1985). The author wishes to render his thanks to Adam Rose and to an anonymous referee for valuable comments. Any errcrs are the sole responsibility of the author. Received January 1988; final draft accepted July 1988.
Journal of Policy Modeling I I ( I ):45-t% ( 1989) 0 Society for Policy Modeling, 1989
45 0161-8938189/$03.50
J. Skolka
46
and the second is about the role of economic policy. The answer to the first question can be found by applying input-output structural decomposition analysis. This approach reflects the logical struc=tureof the input-output model, and relates shifts in the levels and composition of net output value and employment to changes in the following domains: technology domestic final demand foreign trade labour productivity. The second question is more difficult to answer. Many structural changes are a consequence of both endogenous and exogenous economic forces. If these forces drive the economy in the wrong direction, governments implement counteracting measures. To distinguish exactly the effects of these forces on the one hand, and of governmental action on the other, is, however, extremely difficult. In the first part of this paper, structural decomposition analysis will be explained (a detailed description is given in the Appendix). In the second part, the results of a decomposition analysis for the Austrian economy between 1964 and 1976 will be presented.’ No attempt will be made to separate the effects of Austrian economic policy and of other exogenous influences. 2. INPUT-OUTPUT CHANGE
DECOMPOSITION
OF STRUCTURAL
Structural decomposition analysis can be defined as a method of distinguishing major shifts within an economy by means of comparative static changes in key sets of parameters (Rose and Miemyk 1988). Its origins date back to the work of Leontief (1941) on the structure of the U.S. economy. The basic methodology has been extended in several ways. Chenery et al. ( 1963) incorporated some elements of trade into the framework, and Carter ( 1960) added more explicit dynamic elements with a formal consider: !jon of the role of investment in embodied technical change. Still most of the contributions in this area have utilized a restricted
‘It would be tempting to carry out the input-output decomposition analysis of the structural change for a more recent period, and to compare the results with those presented in this paper. However, the input-output table for Austria for 1983 will not be published until 1989, and the existing 1976 table will not be repriced to the 1953 level until 1990.
X-O STRUCTURAL DECOMPOSITION ANALYS!S
4?
set of sources of change, and have not provided a formal ditivation of the methodology. In this section, we offer a step by step presentation of a set of stylized structural decomposition equations incorporating all major categories of change, and, in the course of the exposition, note several variants found in the literature.* In the Appendix, we derive an example of a more sophisticated set of equations to be used for empirical work, following an earlier study by the author (Skolka 19843. A. Basic Considerations Differences in the structure of an economy between two years (or structural differences between two countries) can be shown on production data (gross or net output values) and on employment data, both disaggregated by industries. For each industry, j, the difference between gross output values, the difference between net output values, and the difference between the number of economically active persons can be defined, respectively, as follows: hj = xi’ - $
(Ia)
Au, = vi’ - v; Alj = If - 1;
(Lb) (2)
where x;, X: = grossoutput value of
j ii. two different years (or countries), $‘, vj = net output value of industry j in two different years (or countries), li”, 1; = number of economically active persons in industry j in two different years (or countries). industry
The differences in output and employment levels and the structure of the whole economy can be depicted with the help of the input-output model. Its basic equation and solution are as follows: (I - A) X = Y U - A)-’ Y = X
Va) (3b)
where X = the column vector of gross output values, Y = the column vector of net final demand (i.e., imports), I = the unit (identity) matrix,
final demand minus
‘The pedagogical nature of the presentation stems in part from the lack of any review of the literature on the subject to date.
J. Skolka
48
A = the matrix of total input coefficients (computed Fromthe matrix of
domestic plus imported,intermediatetransactions). In equations (3a) and (3b), output is measured by gross output
values. If we , xpress, for all industries, the differences in gross output values between the base year, 0, and the current year, 1, by the inputoutput equation (3b), we can identify the two general categories of structural change that determine them: changes in the pattern of the final demand, Y, and changes in the input coefficients in the matrix, A. Both categories of impacts can be further disaggregated along three different lines: Ax = X’ -x”=(1
- A’)-’
Y - (1 - Ao)-’ Y” Y” + (1 - A’)-’ (Y’ - Y”) Y’ + (I -A“)-’ (Y’ - Y“) iri -A“)-‘] Y” + (1 - A”)-’ (Y’ - Yo) (Y’ - Y”) - (1 - AO)-‘]
AX = [(l - A’)-’ - (1 - AO)-‘1 ,\‘j-’ - (1 - A?-‘] Ax = [(I Ax
= [(i
+ [(1 -
(4) (3 (6)
(7)
In the first case, the differences in the inverse matrices of input coefficients are weighted with the base year’s final demand, and the differences of final demand with the inverse of the current year’s input coefficient matrix.3 In the second case, the differences in the inverse input coefficient matrices are weighted with the current year’s final demand, and tne differences of final demand with the inverse of the base year’s input coefficient matrix.4 In comparisons over time, an analogy exists between the equations (5) and (6) and the Laspeyres and Paasche index formulae.5 In inter-country comparisons, equations (5) and (4) are equivalent (Balassa 1979, Fay and Fink 1976), but equation (7), which avoids the choice of weighting, can be also used. The differences in final demand and the differences in the inverse matrices are multiplied with the base year’s weights, and the joint effect of both differences is shown separately (Watanabe 1964; 1969). B. Sources of Structural Change In the three transformations of equation (4), the shifts in the structure and level of gross output are explained by changes in final demand
-is approach was applied by Chenery, Shishido and Watanabe (1962), Staeglin and Wessels (1972). Syrquin (1976). Weiss and Wessels (1981), Kubo and Robinson (19841, Fukasaku (1984), and Skolka (1984, 1985). ?his solution was used by Skolka (1975, 1977. 1979), by Nijhowne et al. (1984). and by Rose and Chen (1987). ‘See also Fromm’s (1968) comment on Vaccara and Simon (1968’ and Syrquin (1976).
1-O STRUCTURAL DiTOMF’OSlTION ANALYSIS
49
and by changes m input coefficients. These factors alone, however, cannot explain the shifts in net output values. Economic growth, the composition of final demand, the value-added shares, and import dependence have to be considered, too. Shifts in employment are affkcted also by diffe-rices in productivity growth rates by industries. Economic growth does not, by itself, cause any structural changes in a linear model. Its impact on the changes in the levels of output and of employment must be separated from the influences of the production technology and of the pattern of domestic final demand. The solution i: obtained rather easily if equation (4) is changed as follows: Ax=x’-
2X0
W
Structural shifts can be depicted by deviations of the act4 increases of the gross output values of individual industries from levels corresponding to the growth rate of the whole economy. This growth rate
can, however, be defined in three different ways:” 2,
Y’ -
M'
Y0 -
M”
=
Y’ 22 =
-
2,
-o
P
(&a)
@W
X'
=
X
where Y = toti demand, total imports, x= total gross output value.
M= Jn
the input-output tables, total final demand is split into several components, the effects of which can be accounted separately. The simplest approach is to distinguish between domestic final demand and exports7:
6EQuation(8a) was used by Chenety, Shishido and Watanabe ( 1962). Morley and Smith (!970), Syrquin ( 1976), Balassa ( 1979) and Nijhowne et al. ( 19841. Fduation (8b) ‘*‘asapplied by Skolka (1975, 1977, 1979, 1984, 1985) and Rose and Chen (1987). Equation (I(c) was used by Kubo and Robinson (1984). Other more sophisticated measures of economic growth have been used (see, e.g., Leontief and Ford 1972). ‘Chenery, Shishido and Watanabe (1962), Syrquin (1976), Balassa ( 1979), Kubo and Robinson (1984), and Torii and Fukasaku (1984). In a more sophisticated approach, several authors consider the changing weights of various
50
J. Skolka
Y =D-rE
(9
the volume and structure of output measured by net output values (see equation lb), changes in the value-added shares must be considered, too. These shares (in the gross output values) are defined as: n such that x a,j + ad = 1 Wa) % = lTr, In
4
i=,
where v, = net output value in industry j, n = number of industries.
The difkrence in. value-added between two periods can accordingly be expressed *as:
In turning from gross output values to net output values, two different
weightings analogous to equations (5) and (6) can be used. The development of labour productivity co-determines the shifts in the level and structure of the economically active persons (see equation 2). Labour productivity is measured by net labour input coefficients: li
a,, = vj
(1 la)
where Ii = number of economically active persons in industry j.
The difference in the number of economically active persons between years 0 and 1 equals: A lj = alj v; - ayj vy
(1 lb)
Again, as with equations (5) and (6), and with equations (13) and (14), two weightings can be applied. Import dependence and its changes can be defined either in a descriptive way, which only note the change in the import dependence; or in a normative way, which applies certain criteria to that change (Desai 1969; Fane 1973). In input-output structural decomposition
omestic final demand. See Skolka (1975, 1977, 1979, 1984, 1985). Weiss and Wessels (1980, 1981), Nijhowne et al. (1984), and in inter-country comparisons, Fay and Fink (1976).
I-O STRUCTURAL DECOMPOSITION ANALYSIS
51
analysis, four measures of changes in import dependence have been utilized. The deviations of import growth rates in industries from the growth rate of the domestic demand measure the import substitution in the “traditional” way (Balassa 1979). The growth of the gross domestic product is the measure of economic growth (Johnson 1959); deviations of import growth rates in industries measure import substitution (Chenery et al. 1962): Ax,
= (1 - A)-’
AM
AM=M'-zM"
(Qa)
(12W
where AX,,, = changes in the vector of the gross output values caused by import substitution M'M' = column vector of imports (classified by supplying industries) in the years 1 and 0, respectively.
Industry specific import quotients depict the changes in of the import dependence. These coefficients can be conceived in different v~ays:~ w,
=-
wi
m, x, - ei
*z--f m-
Wa) (136)
xi
W$
=
-
%
Yi - e,
(13c’r
where rn? = total imports of industry i. xi = total intermediate transactions of industry i.
m,* = imported intermediate transactions of industry i. m,/ = direct imports of industry i for final demand. ej = exports of industry i.
Only the matrix of imported transactions allows us to assess the
‘Nijhowne et al. ( 1984), Kanemitsu and Ohnkbi ( 1986), and Pal ( 1987), used the ratios of imports to domestic demand (gross output value minus exports), as defined by the equation (19a). Kubo and Robinson (1984) wed ratios oft Jmestic production to domestic demand, i.e., equation (la). Torii and Fukasaku (1984) used tv+o import quotients. according to the equations (13b) and (13~).
3.
52
Skolka
import dependence pre&ely .’ Matrices of input coefficients for the domestic and for the imported transactions can be calculated as follows: lo
(144
ai = af: + a:
The coeffients at and a$?can also be defined as products of the “share coefficients” $j and 4 and of the total input coefficients (which can be computed from matrices of total transactions, i.e., domestic plus imported transactions: af3 = a$$
W-4
a: = a$$
(15b)
3. INPUT-OUTPUT STRUCTURAL ANALYSIS #‘OR AUSTRIA
DECOMPOSITION
In the investigation of the changes in the levels and structures of net output and employment in Austria between 1964 and 1976, the elements presented above were combined as follows: 1. The matrices of intermediate and final demand were weighted
according to equation (5). 2. Economic growth was measured by the growth of total final
demand, following equation (8b). 3. Exports and domestic final demand were dealt with separately, following equation (9). 4. Shifts in the weights of final demand components and shifts in their commodity composition were both considered. ‘This approach reveals, inter alia. that the rates of growth of imports or the import quotients can also change due to alterations in technology and in final demand. “Dahl\ 1970) was the first to propose the use of import input coefficients for the investigation of changes in the import Dependence (in 1976 Syrquin arrived at the same solution). These coefficients were first used empirically by Skolka (1975) and Fay and Fink (1976).
I-O STRUCTURALDECOMPOSITIONANALYSIS
53
Table 1: Final Arrangementof the Steps in The Structural Decomposition Analysis’ Difference of Type of structural
change
1. Growth of domestic final demand 2. Productivitygrowth 3. Changes in technology Intermediateinputs Value added shares 4. Changes in domestic final demand Commoditycomposition of final demand components Weights of final demandcomponents 5. Changes in exports Contributionof exports to the growth of total final demand Commoditycomposition of exports Share of exports in total final demand 6. Changes in importdependence Intermediateimports Direct imports for final demand
computationd
steps
IaX-IX III-II IX-VIII VI-IV V-IV VI-V I-Ia ‘VII-VI VIII-VII II-I IV-III
“The effects I and 2 combined give the net effect of final demand and productivity growth; 5 and 6 combined give the net effect of changes in foreign trade.
5. Changes in import dependence were accounted for in each cell of the input-output table, following equations (14) and (15). The input-output structural decomposition analysis was carried out as a step-by-step transition from matrices, vectors, and scalars of the input-output table for 1964 (i.e., for the year 0) to those of the inputoutput table for the year 1976 (i.e., the year 1). The formulae associated with each step are given in the Appendix. The results of the calculations were rearranged into more homogeneous groups and are presented in Table 1. This approach is one of many possibilities; a unique, or ‘ ‘optimal, ’ ’ solution to the structural decomposition problem has not yet been derived. Its advantages are the fine level of disaggregation and the additivity of the partial effects. Its disadvantage is the influence of the sequence of the analytical steps on the size of the partial effects. A. The Macro-econo The Austrian input-output tables analysis, are valued at 1976 table at 1964 prices (QeStZ 1973) was supplemented by the matrix of
J. Skolka
54
imported transactions and repriced to the 1976 level (Holub, Richter and Schwarzl 1984). A version of the 1976 input-output table, compatible with the 1964 table, was compiled from raw input-output statistics prior to the publication of the official 1976 table (Richter 1981). Both input-output tables were aggregated to the 19 industry level in a manner consistent with the Austrian National Accounts. A comparison of data in the input-output tables for 1964 and 1976 reveals the structural cbpages in the Austrian economy between 1964 and 1976, which have to be considered in the input-output structural decomposition analysis. 1. Economic growth: Between 1964 and 1976, domestic final demand increased in real terms by 65.6 percent, and total final demand rose by 74.8 percent. The difference of both rates was due to the very fast growth of exports. 2. Changes of technology: In the input-output model, changes in technology cause shifts in the input coefficients and, in each column, complementary shifts in the value added shares. The reason are as follows: 0 Substitution of intermediate inputs: certain raw materials and half made products are substituted by others. * Changes in division of labour: parts and semi-finished products produced by certain establishments are externalized and purchased from other establishments. Changes in the composition of output: innovations, shifts in relative prices and changing demand affect the “output mix” of the industries. In Austria, between 1964 and 1976, the significant substitution effects were the increasing intermediate demand on products of chemical and petroleum industries and of electricity and water supply, and declining intermediate demand on products of mining, agriculture, and forestry and other services. The division of labour was intensified; among and also within industries, most intra-industry transactions increased. The product mix of the manufacturing and service industries was adjusted to the changing demand. 3. Changes in domestic final demand: Between 1964 and 1976, the share of public consumption remained stable, while the share of private consumption declined in favour of gross fixed capital formation and tourist expenditures. The commodity composition of the final demand components (in real terms) also changed as follows: l
I-O STRUCTURAL DECOMF’OSITIONANALYSIS
55
In private consumption, the share of agriculture and food products declined, and the share of petroleum refining and metal products increased. 0 In public consumption, the share of public services (expenditure on staff in real terms) declined and the share of purchases of goods increased. In gross capital formation, the share of construction increased, and the share of metal products declined. In tourists’ expenditures, the share of restaurant and hotel services declined and the share of purchases of goods increased. 4. Changes in foreign trade: The share of exports in total final demand increased from 14.9 percent in 1964 to 19.4 percent in 1976. The commodity composition of exports shifted in favour of chemicals and metal products; basic metals and mining lost shares. Intermediate imports of textiles, paper and paper products, and base metals expanded at the expense of the demand on domestic products. In final demand, import penetration was strong in private consumption (chemicals, textiles, wood and wood products) and in gross fixed capital formation (metal products). 5. Labour productivity: As in other industrial countries, labour productivity was growing fast in the goods producing sector (in particular in agriculture and in the textile industry), and was stagnating in the service sector (in particular in the public administration). l
l
l
B. Results of the Calculations for Austria, 19644976 In Austria; between 1964 and 1976, the growth of final demand, and the structural shifts described above, caused shifts in the levels and structures of net output value and in the allocation of labour by industries (Table 2). In 1964,3,2 10.7 thousand persons were employed in Austria; these persons produced net output value of 409.9 billion Austrian Shillings (AS). Between 1964 and 1976, total final demand increased by 65.6 percent. Had there been no structural changes in the economy, all entries of the 1964 input-output table would have increased by that rate, as would have the net output value (283.9 billion AS), and employment (2,223.9 thousand persons). In fact, the actual increases were 250.3 billion AS for net output value and 9.7 thousand persons for employment (see Table 2). A large part of the difference between the hypothetical and actual increases in the employment, i.e.,
12.9 17.8 71.1 21.2 59.3 87.5 19.4 35.4 60.3 35.9 92.3
8.5 7.5 38.0
10.6 40.0 51.3 15.1
19.6 24.4 32.6 62.7 660.3
19.0 12.2
7.3 6.5
409.9
13.9
11.3
Total economy
36.0 4.0 29.8 17.7 14.5
30.9 4.8 19.7 11.7 7.5
Agriculture and forestry Mining Food, beverages Textiles, leather Wood products Paper, paper products Chemical (exe . petroleum products) Petroleum products Pottery, china glassware Basic metals Metal products Electricity, water supply Construction Trade Restaurants, hotels Transport, communications Financial services Other services Public administration
1976
I!364
Industries
Net Output (Billion AS)
250.4
15.8 35.9 3.3 29.6
10.7 19.3 36.2 4.4
4.3 10.3 33.0
11.7 5.7
2.7
5.1 -0.8 10.1 6.0 7.0
Absolute
61.1
80.5 147.0 10.1 47.2
100.9 48.4 70.6 29.1
50.8 138.8 86.9
160.1 88.0
235
16.4 - 16.9 51.4 51.3 93.9
ln percent
Difference WC64
Table 2: Net Output and Employment by Industries: 1964 and 1976
3,210.7
197.2 119.9 116.2 359.4
27.8 265.3 355.6 120.3
57.4 65.0 294.7
56.4 9.7
70.9
617.1 30.8 134.8 212.0 100.2
1964
3,220 4
211.9 185.3 97.9 527.6
32.1 269.2 408.7 148.4
49.6 66.4 347.2
72.2 8.6
67.1
343.0 17.1 122.9 149.2 96.0
1976
Employment (Thousand Persons)
+9.7
+ 14.7 +65.4 - 18.3 + 168.2
+4.3 +3.9 +53.1 +28.1
-7.8 + 1.4 + 52.5
+ 15.8 -1.1
-3.8
- 274. I - 13.7 -11.9 -62.8 -4.2
Absolute
+0.3
+7.5 + 54.5 - 15.7 +46.8
+ 15.5 +1.5 + 14.9 +23.4
- 13.6 +2.2 + 17.8
+ 28.0 -11.3
-5.4
-44.4 -44.5 -8.8 - 29.6 -4.2
bl percent
Difference 1976-64
I-O STRUCTURAL DECOMPOSITION ANALYSIS
57
1,995.5 thousand persons, was due to the productivity growth. The rest, i.e., 2 18.7 thousand persons, as well as the difference between the actual and hypothetical increases in net output values, i.e., 33.6 billion AS, can be, with the help of input-output structural decomposition analysis, attributed to various structural changes. Changes in technology caused a decrease in net output value of 8.9 billion AS and in employment of 73.9 thousand persons. The positive effect of chaqges in intermediate inputs, i.e., plus 16.8 billion AS net output value and plus 24.2 thousand persons, was smaller than the negative effect of the changes in value added shares (minus 25.7 billion AS net output value) and minus 98.1 thousand employed persons. Changes in domestic final demand caused a decline in net output value of 6.0 billion AS and in employment of 101.1 thousand persons. The shifts in the weights of final demand components caused small increases of 0.3 billion AS net output value and in employment of 4.7 thousand persons. The changes in the commodity composition of the final demand components caused a decline in net output value of 6.3 billion AS and in employment of 105.8 thousand persons. Changes in exports had a positive effect of 22.8 billion AS net output value and 183.1 thousand employed persons. The effect of tte difference between the faster growth of exports and the slower growth of total final demand was overwhelming: 22.8 billion AS net output value and 179.2 thousand employed persons. Changes in the commodity composition of exports had tiny positive effects of 0.6 billion AS net output value and of 2.2 thousand employed persons. The increase of the share of exports in total final demand had a similarly weak effect of minus 0.6 billion AS net output value and of plus 1.8 thousand employed persons. Changes in the import dependence caused a decline in net output value of41.5 billion AS and in employment of 226.7 thousand persons. Three quarters of both losses could be allocated to higher imports for final demand (mainly for private consumption and for gross fixed investments). The total effect of changes in foreign trade (i.e., the balance of the positive effects of exports and negative effects of imports) amounted a loss of 18.7 billion AS net output value and of 43.6 thousand employed persons. A table similar to Table 3 could be constructed for each of the 19 industries. Such large tables would not unly require excessive space, but the mass of data could hide the truly important facts. The results will be summari omogeneous groups of in for the formatio e groups are the r2sitive
i. Sko!ka
58
Table 3: Structural Decomposition of the Differences in the Net Output and Employment Levels between 1964 and 1976 Net Output
Levels, Differences and
Compownts
of StructuA Change
Row
(IMlion AS)
Employment (tbouspads)
Actual level: 1964 1976 Difference: 1976-64
1 2 3(2 - 1)
z*; 250:4
3 210.7 3 220.4 9.7
Hypothetical value 1976 Hypothetical increase A 1976-64
4 S(4 - 1)
693.9 283.9
5 434.6 2 223.9
Impact of labor productivity Hypothetical increase B 1976-64 A Difference between the actual B and hypothetical increase
6 7(5 -6) 8(3-7) 8(3-4)
- 33.6
- 1 995.5 228.4 -218.7 -
Cbges in technology: MeTmediate inputs Value added shares
9(10+ 11) 10 11
-8.9 + 16.8 -25.7
-73.9 + 24.2 -98.1
Changes in domestic final demand Commodity composition Weights of components
12(13+ 14)
-6.0
- 101.1
13 14
-6.3 i-o.3
- 105.8 +4.7
Changes in exports Faster growth of exports Commodity composition Weight of exports
15(16+ 17+ 18) 16 17 18
+ 22.8 + 22.8 + 0.6 -0.6
+ 183.1 + 179.2 + 2.2 +I.8
Changes in import dependence Intermediate imports Final demand
19(20+ 21) 20 21
-41.5 - 10.9 - 30.6
- 226.7 - 50.0 - 176.7
Total effect of domestic factors Total effect of foreign trade
22(9 + 12) 23(15+ 19)
- 14.9 - 18.7
- 175.0 -43.6
tions from the development of the following indicators for the whole economy: 1. The average rate of productivity growth. 2. The impact of structural shifts both on the net output values and employment. 3. The hypothetical development of the employment, corresponding to the increase in total domestic demand and the average ~rod~lctivity growth in the economy. The homogeneocs groups will be described by ( + ) and ( - ) signs. y a combination ( - ivided into the following six groups:
I-O STRUCTURAL DECOMPOSITION ANALYSIS
(-
59
- - ) Agriculture and forestry; Food, beverages and tobacco;
((+ (-
+ - ) - - ) + +)
(+
-
+)
Textiles, wearing apparel, leather; Pottery, china, glassware. Petroleum and petroleum products; Other services. Mining; Paper, paper products; Other services. Chemicals; Basic metals; Metal products, machinery, equipment; Electricity and water supply; Transport and ccmmunications; Financial services. Construction; Restaurants and hotels; Public administration.
Only four industries out of 19 followed the pattern of the change in the whole economy. The impact of productivity growth was negative in 12 industries, although the impact of the structural shifts was negative in 10 industries. The combined effect of both was negative in nine industries only; positive effects were more frequently larger than the negative ones. 5. CONCLUSIONS The input-output structural decomposition analysis of the changes in the levels and structures of net output value and employment in Austria between 1964 and 1976 shows, at the highest level of aggregation, a divergence between the development of net output value on the one hand and development of employment on the other. The actual increases in total net output value as well as in employment were lower than the hypothetical ones (i.e., under the assumption of no structural transformation). The relative difference in the number of employed of - 6.8 percent was greater than th: relative difference in the level of net output value of - 5.1 percent. The relative weights of various structural effects differed profoundly as expressed in percentages of the total change. 1. Net output values: the impact of foreign trade prevailed with a weight of 55.6 percent; the weight of the domestic demand .4 percent, composed of 26.4 percent of the impact of was the changes in technology (in the intermediate demand) and 18.0 percent of the impact of the changes in the domestic final demand. 2. Employment: the impact of the fo estic factors percent. percent; the weight of the changes in the technology was 33.8
60
J.
percent, and the weight of the changes in the domestic final demand was 46.3 percent. In Austria, between 1964 and 1976, the shifts in net output values were caused mainly by foreign trade, and also by changes in intermediate demand. Shifts in employment were caused mainly by changes in the domestic final demand (industries delivering to domestic final demand had very different productivity development), and also by changes in intermediate demand. The answer to the question “Why does the structure of net output value change?” should be sought in the competitiveness of particular industries. The answer to the question ‘Why does the structure of employment change?” should be sought in the differential productivity growth in industries delivering to domestic final demand. Technology (intermediate demand) matters in both cases. Two other aspects of the structural transformation between I964 and 1976 are import substitution and international division of labour. The changes in the net output values and employment are consequences of the “pure” negative import substitution (i.e., imports substituting for domestic production within each of the 19 industries, not balanced by an increase in exports). Import substitution in a “wider sense”, i.e., shifts in demand to products where a greater share is imported (e.g., a switch of private consumption from foods, mainly produced in Austria, to predominantly imported petroleum products and metal products, such as motor cars), cannot be captured so easily. It is mixed with consequences of the shift in den;.aid from products with a high labour intensity to products with low labour intensity. The penetration of imported products on the Austrian domestic market, and a parallel increase in the exports, result from a more intensive intemationd division of labour. Changes in both exports and imports are large, but tend to balance each other. For example, in the metal products, machinery and equipment industry there is a small positive total effect of changes in foreign trade of 6.3 thousand persons, which is the balance of the positive impact of exports of 56.9 thousand persons and of the negative impact of imports of 50.6 thousand persons. Paralleling the increase in international division of labour, also the domestic division of labour intensified in Austria between 1964 and 1976. This change emerges in the input-output structural decomposition analysis as considerable negative effects of the changes in value on AS net output value and of 98.1 ges in
I-O STRUCTURAL DECO
SrrION
LYSIS
The following detailed description of the decom a continuation of Section 2 of this
sition andtysis
SUPPLEMENTARY VARIABLES FOR THE INPUT~~~~~~
THE INTERDEPENDENCE OF STRUCT
CHANGE
ables are still required for the analytical approach:
ematical
ANALYSIS
is
OF
The fo! aviation
SHAREOFEXPORTSANDSHAREOFDOMESTICFINALDEMANDINTOTAL HNAL DEMAND E
c, = Y
(16b)
where E = exports Y = total final demand.
SHAREOFDOMESTICMNALDEMANDIN
TOTALFINALDEMAND
D c, = Y
(1W
where D=
domestic final demand
SHAREOFDDMESTICFINALDEMANDCOMPONENTKINDOMESTICFINAL DEMAND c,
YA D
= -
(1W
where Y, = component k of domestic final demand
These shares are elements of a vector of the composition of domestic final demand: Cd = kA-
The composition of total final de and is given as a ro C’ = [Cd.c,l
J.
62
Skolka
To measure import substitution in intermediate transactions, four matrixes of input coefficients of domestic transactions A D.o = [ay * sp,:q,
WW
AD. I
WW
=
[cl;;’
- sfy],
A a”O = [a;’ . CO],
W3c)
A a”” = [ayJ * g ‘1.
WW
first two are matrixes of the actual coefficients of the years 0 and 1, in the other two matrixes we convert the total input coefficients of the respective year with the shares of domestic output of the alternate year into hypothetical coefficients of domestic transactions. Demand structure coefficients are defined for the individual final demand components:
The
b,
=
$
WW
k
where :
Yik
=
total delivery {i.e., domestic output and direct imports) of industry i for final demand component k.
In each delivery for domestic final demand a distinction can be made between domestic output and direct imports. In exports it is assumed that there are no direct imports (i.e., re-exports). For domestic final demand, too, share coefficients can be defined: Wb)
where $=
shoe of domestic output in total delivery of industry i to domestic final demand component k.
We can now define four matrixes of structure of domestic deliveries for domestic final demand: (2W B ;,’ = [b;’ . e’], e”O
= [b;’
g.0’1
=
[by
GObI
G”l,
(2(k)
- s-p].
(204
-
n com?~tat~o~s concerning exports we use symbols BFSOand BF-’
I-OSTRUCTURALDECOMPOSITIONANALYSIS
designating the export structure respectively.
63
vectors in thr: JWI-s 0 and 1
THEINTERDEPENDENCEOFSTRUCTURALCHANGE~ Inprinciple,the analysis of the interdependence of structural change!: follows equation (5). On the right hand side of this equation, the combinations of matrixes, vectors, and scalars X0 = (I - A”*~-‘[B~~(l
- c> + B:“c~y”
(2W
respectively X’ = (I - AD*‘)-‘[B:’ C; ( 1 - c;)+ B;’ c:]y’
(2Jb)
allow to reconstruct the calculations of the actual vectors of gross output from the actual input-output tables of the years 0 to 1 respectively. The “anatomy” of interdependence of structural changes according to equation (5) is carried out as a step-by-step transition from matrixes, vectors, and scalars of the year 0 to the year 1. In this transition the difference of the effects of the level of total final demand and of domestic final demand is recorded separately. The step I of computations for year 0 corresponds to the following equation: X = (1 - AD”‘)-‘[e” c (1 - c3 + f3f.Oc3y’.
(22)
The value of y’ is a scalar, defined as z y”; c, is a scalar. z is the increase in total final demand between 0 to 1. The growth of total final demand reflects the growth of domestic final demand on the one hand and the growth of exports on the other. Since the two usually grow at different rates, an intermediate step (la) is interposed. In the first instance growth of domestic demand only, ?, is considered, and the difference between the level of gross output that accords with this growth, and the level that results from equation (23, is interpreted as export growth effect. Following equation (5) a transition is made in two steps from one to the other matrix of the input coefficients. In the step II, the total input coefficients remain constant, while the shares of domestic deliveries 4 are changed. Equation (18d) is applied to establish the effect of import substitution in the intermediate transactions: l
Xl’
=
(I
-
A,.“‘)- ’ [fl:” c”d1 - c;) + BF” cny'
(23)
In the next step (III) the matrix of the input coefficient consistent in time with final demand is introduced. n this way the effect of input coefficient changes is taken fully into account:
J. Skolka
64
&I =
(I - AD*‘)-
’ [f$” C’f# - cf) + f8f.Oc3y’
(24)
With these two steps the transition from year 0 to year 1 on the right hand side of equation (5) is completed. On the left we start with the changes of the structure coefficients bik. Equation (20d) is used in the step IV to allow for import substitution in domestic final demand: =
Xl”
AD*‘)-’ [e”
-
(I
(?A1 - c3 + BF” c3y’
(25)
Next (step V) follows the change in commodity composition of the domestic final demand components: X” = (Z - A”.‘)-’ [@f’ c”J1 - c:) + v
~3,’
(26)
and (step VI) in the shares (weights) of the components in domestic final demand: Y*VI =
(I
AD*‘)-’
_
[_fj’
c# -- c:, f
8f.O c;ly’
(27)
Tn the last two steps the structural effects of the exports are taken into account. First (step VII) the consequences of changes in the commodity composition of expqrts XVi’
=
::I
-
AD.‘)-’
[e’
CXI - c:) + B,D”cay’
mv
and in step VIII, oompleting the chain, the change in the relation between exports anc;idomestic final demand is allowed for: ”Y VIII
=
:(I
-
A,.‘)-’ [@” Cxl
- c:) + Bf” c;]y’
(2%
Transition from gro& to net output values and to the number of economically active persons follows. In step IX we apply a base year weighting version of the net value equation. In the final step X, a base year version of the labour productivity equation is applied.
Balassa. B. (1979) Accounting for Economic Growth: The Case of Norway, Oxford Economic Papers 41(3),
d.15-436.
A. (1960) Srrucrural Ckznge in the i,mrk.vz Economy, Cambridge: Harvard University Press. Chenery, H.B. (1960) Patterns of Industrial Growth, American Economic Review 50(2), 624-
Carter,
654.
Chenery, H.B., Shkhido, S., and Watanabe, T. (1963) The Pattern of Japanese Growth, 19141954, Econolmetriid 30( 1), 98- 139. Dahl, H.E. (1970) l.mport Substitution vs. Other Sources of Coefficient Change in Input-Output Models, Mimeo, Chr. Michelson Institute, Bergen. Desai, P. (1969) Ahemativ~ Mensures of Import Substitution, O.@ord Economic Papers 21(3) 312-324.
Fane, 6. (1973) Consistent Measures of Import Substitution, Economica 25(2), 251-263.
I-O STRUCTURAL DECOMPOSITION ANALYSIS
65
Fay, J. and Fink, G. (1976) Ein Input-Output-Vergleich der Bmtto-Produktionsstr&ur nach Wirtschaftsbereichen zwischen Osterreich und Ungam. Wiener lnstitut fuer Intemationale Wirtschaftsvergleiche, Vienna. Feldman, S., McClain, D.. and Palmer, K. (1987) Sources of Structural Change in the United States, 1963-78: An Input-Output Perspective, The Review of Economics and Statistics 69(3), 503410.
Fromm, G. (1968) Comment on Vaccara and Simon. In The Industrial Composition of Income and Product (J.W. Kendrick, Ed.). New York: Columbia University Press, pp. 19-66. Holub, H.W., Richter, J., and Schwarzl, R. (1984) Reale Input-Output-Tabelle fuer Osterreich 1964, zu Preisen 1976, Innsbruck University, Innsbruck. Johnson, H.G. (1959) Economic Develcpment and International Trade, Natiunaloekonomisk TidsskrijI 56.253-272. Kanemistsu, H. and Ohnishi, H. (1988) An input-Output Analysis of Technological Change in the Japanese Economy. In Frontiers of Input-Output Anafysis (R. Miller, K. Polenske and A. Rose, Eds.). New York: Oxford University Ptess. Kubo, Y. and Robinson, S. (1984) Sources of industrial Growth and Structural Change. A Comparative Analysis of Eight Countries, Proceedings of the Seventh International Conference on Input-Output Techniques, United Nations, New York, pp. 233-254. Leontief, W. (1941) The Structure of the American Economy. New York: Oxford University Press. Eeontief, W., and Ford, D. (1972) Air Pollution and the Economic Structure: Empirical Results of Input-Output Computations. In Input-Output Techniques (A. Brody and A.P. Carter, Eds.). Amsterdamz North-Holland. Morley, S.A., and Smith, G.W. (1970) On the MeasTrcment of Import Substitution, American Economic Review 60(4), 728-735. Nijhowne, S., Gribble, S., Hamilton, K., and Syed, A. (1984) Structural Change in the Canadian Economy 1961-1971, Proceedings of the Seventh International Conference on lnputOutput Techniques, United Nations. New York, pp. 297-332. (OstZ) Ostetreichisches Statistisches Zentralamt, (1973) Bundeskammer der gewerblichen Wirtschaft, Osterreichisches Institut fuer Wirtschaftsforschung, (1973) Input-Output-Tabelle 1964, Vienna. Pal, D.P. (1986) Import Substitution and Changes in Structural Interdependence: A D~omposition Analysis, Eighth International Conference on Input-Output Techaiques, Sapporo, Japan. Richter, J. (198 I) Strukturen and Interdependenzen der Oesterreichischen Wirtschaft-Ergebnisse der Provisorischen Input-Output-Tahelle 1976, bundeskammer der gewerbiichen Winschaft, Vienna. Rose, A., and Chen, C.Y. (1987) Sources of Change in Energy Use in the U.S. Economy, 1972-1982, Regional Research Institute, West Virginia University. Rose, A., and W. Miermyk (1989) Input-Output Analysis: The First Fifty Years. Economic Sys?ems Research (forthcoming). Skolka, J. (1977) Input-Output Anatomy Of Import Elasticities, Empirical Economics 2(3), 123136. -. (1984) Input-Output Anatomy of Changes in Employment Structure in Austria between 1964 and 1976, Empirica (Austrian Economic Papers) I l(2). 2(35-233. (1985) Produktion, Beschaeftigung und Strukturwandel in Osterreich, Wirfschq$tspof-. itsche Blaetter 32(5), 290-330. Staeglin, R., and Wessels, H. (1972) Intertemporal Analysis of Structural Change in the German Economy. In Input-Output Techniqzs (A. Brady and A.3. Carter, Eds.) Amsterdam: North-Holland, pp. 370-392.
66
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Syrquin, M. (1976) Sources of Industrial Growth and Change-An Alternative Measure. Mimeo, European Meeting of the Econometric Society, Helsinki. Torii, Y., and Fukasatu, K. (1984) Economic Development and Changes in Linkage Structure: An Input-Output Analysis of the Republic of Korea and Japan, Froceedings of the Seventh International Conference on Input-Output Techniques, United Nations, New York. Vaccara, B., and Simon, N. (1968) Factors Affecting the Postwar Composition of Real Product. In The Industrial Composition of Income and Product (J.W. Kendrick, Ed.). New York: Columbia University Press, pp. 19-66. Watanabe, ‘I. (1964) An Experimental Comparison of production Structures: EEC Countries and Japan, Weftwirtsclrofrliches Archiv 92( 11, 409-425. -. (1969) Approaches to the Ptobiem of Intercountry Comparison of Input-Output Relations. A Survey and Suggestions for Further Research, in United Nations, International Comparisons of Interindustry Data, New York, pp, 187-201. Weiss, J.P., and Wessels, H. (1980) Strukturanalyse der Prod&ions-und der Beschacftigungsentwicklung in der Bundestepublik Deutschland 1962 bis 1972. In Empirische Wirtschafl~orschwtg-Konzeptionen. Verjdtren und Ergebnkse Berlin, pp. 153-170. -. (1981) Komponentenzerlegung der Prod&ions und Beschaeftigungseffekte von Veraendenmgen der Nachfrage und der Produktionskoeffizienten. In Deutsches Institut fuer Wirtschaftsforschung, Abschwachung der Wachstumsimpulse (Analyse der strukturellen Entwicklung der Deutschen Wirtschaft), Materialband I zur Strukturberiechterstattung 1980, Berlin.