Sectoral Linkages and Industrial Efficiency: A Dilemma or a Requisition in Identifying Development Priorities?
This paper attempts to provide an empirical evaluation of the potential relationship between sectoral linkages and technical efficiency using the 1996 US input-output tables. Sectoral input-oriented technical efficiency is obtained by the econometric estimation of a stochastic input-distance function based on Battese and Coelli (1995) model formulation. On the other hand, sectoral backward and forward linkage coefficients were computed using the non-complete hypothetical extraction method suggested by Dietzenbacher and Van der Linden (1997). The empirical results suggest that there is a negative relationship between sectoral efficiency and linkage coefficients, while on the other hand efficient sectors tend to purchase their intermediate inputs from efficient sectors and vice versa.
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