Trade and Linkages Using Input-Output Approach: An Empirical Investigation of Bangladesh

In: The Pakistan development review: PDR, Volume 33, Issue 1, p. 75-92

Abstract

Employing a variant of the open-static Leontief model and a
53-sector input-output table, the paper identifies a variant of the key
sectors in the Bangladesh economy in terms of trade linkages. The
concepts of gross and net linkages are introduced and the analysis is
extended to both current (flow) and capital (stock) accounts. On the
gross linkage criterion, only a handfnl of sectors emerge as key sectors
with three or more linkages. These sectors are from within the
manufacturing and services categories. This is also the case with
sectors having two strong linkages. Agricultural sectors do not feature
at all. A transition from gross to net linkages changes the rankings
quite significantly. Most agricultural sectors show two strong linkages
in the flow account. The findings suggest that Bangladeshi export
sector· is typically undiversified in that it relies heavily on
agriculture and related industries, with jute and jute textiles
accounting for over 70 percent of net export earnings. Not surprisingly,
most sectors in the industrial complex are net importers and the
domestic production of industrial goods is highly
importintensive.