Unboxing the Ready Made Garments (RMG) sector of Bangladesh

The ready-made garments (RMG) sector of Bangladesh has developed immensely under the broad radar of the export market, and its size is beyond imagination. Unfortunately, there has been no study that explores the whole universe of the RMG sector of Bangladesh rather the story of the RMG sector often involves the export market only. The discussion of this paper intends to explore the methodology of unboxing the whole universe of the RMG sector of Bangladesh that includes small and medium-sized manufacturing and processing units that are often involved with subcontracting for other factories (producing for the export market as well as domestic market), are suppliers of the domestic market, are producers of accessories, and are providing backward linkages and associated services. The discussion addresses that along with export-oriented RMG factories there exists an unexplored and unboxed universe of manufacturing and processing units associated with the RMG sector of Bangladesh that contributes to investment, employment, trade, export, and the economy as a whole, all of which remains unaccounted for.

Impact of Backward Linkages and Domestic Contents of Exports on Labor Productivity and Employment: Evidence from Japanese Industrial Data

This study examines how backward linkages (foreign value added [FVA] exports) and domestic value-added (DVA) exports impact industry-level labor productivity and employment in Japan by estimating a static and dynamic panel model using data drawn from the World Input-Output Dataset and Socio-Economic Accounts. We find that the domestic content of trade is a key driver of productivity and employment in Japan for all industries, while backward linkages lead to declining productivity and foster labor displacement. A sectoral analysis reveals that productivity benefits most of the backward linkages and domestic value-added exports in the manufacturing industry but weakens as the backward linkages increase in the service industry. We find that the DVA exports variable promotes employment, whereas the FVA variable displaces it.

PERAN INDUSTRI MINUMAN BERALKOHOL DALAM PEREKONOMIAN INDONESIA: ANALISIS INPUT-OUTPUT

ABSTRACT Policy to open investment in alcoholic beverage invite pros and cons in the public. The proponents of the policy argue the importance of alcoholic investment from economic point of views. This article aims at analyzing the role of alcoholic beverage industry in Indonesian economy. The data was Input-Output Table of 2016 which was aggregated into 18 industries. Analyzes carried out were output multiplier, employment multiplier, and income multiplier as well as forward and backward linkages. The results of analyzes show that output multiplier is low, employment multiplier is high, and income multiplier is high. In addition, forward and backward linkages are both below one. From these results, it can be concluded that alcoholic beverage industry is not a leading sector in Indonesia and its role is relatively limited. Government should be cautious in opening up investment for the industry for investment, taking into account that the industry’s pulling factor to input providing industries as well as pushing factor to output using industries are relatively low. In addition, while employment multiplier is high, at present employment in alcoholic beverage is relatively limited. Keywords: Alcoholic beverage, Input output table, Output multiplier, Employment multiplier, Industrial linkage ABSTRAK Kebijakan untuk membuka investasi minuman beralkohol mengundang pro dan kontra di masyarakat. Pendukung kebijakan tersebut menyampaikan pentingnya investasi di sektor tersebut dilihat dari kepentingan ekonomi. Penelitian ini bertujuan untuk menganalisis peran industri minuman beralkohol dalam perekonomian Indonesia. Data yang digunakan adalah Tabel Input-Output tahun 2016 yang diagregasi menjadi 18 industri. Analisis yang dilakukan adalah efek pengganda output, tenaga kerja dan pendapatan serta keterkaitan ke depan dan ke belakang. Hasil analisis menunjukkan bahwa angka pengganda output rendah, angka pengganda tenaga kerja tinggi dan angka pengganda pendapatan tinggi. Selain itu, efek keterkaitan ke depan dan keterkaitan ke belakang kurang dari satu. Dengan hasil-hasil tersebut dapat disimpulkan bahwa industri minuman mengandung alkohol bukan merupakan sektor unggulan di Indonesia dan perannya relatif terbatas. Pemerintah perlu berhati-hati dalam membuka investasi atas industri tersebut, dengan pertimbangan bahwa daya tarik terhadap industri penyedia input dan daya dorong terhadap industri pengguna output relatif rendah. Selain itu, meskipun angka pengganda tenaga kerja tinggi, selama ini penyerapan tenaga kerja relatif rendah. Kata Kunci: Minuman beralkohol, Tabel input-output, Pengganda output, Pengganda tenaga kerja, Efek keterkaitan

Analisis sektor unggulan perekonomian Indonesia: Model input-output

Penelitian ini bertujuan untuk mengetahui peranan sektor ekonomi termasuk bagaimana keterkaitan masing-masing sektor tersebut mempengaruhi ekonomi di Indonesia. Penelitian ini menggunakan data Tabel Input-Output Indonesia menurut Harga Dasar Klasifikasi 17 Sektor yang diagregasi menjadi 9 sektor. Metode analisis dilakukan menggunakan input-output model yang penghitungannya dibantu dengan menggunakan program Microsoft Excel. Dari penelitian, didapatkan bahwa sektor industri pengolahan memperlihatkan keterkaitan langsung kedepan dengan nilai tertinggi. Hal ini dapat ditafsirkan bahwa pertumbuhan ekonomi Indonesia lebih banyak dipengaruhi oleh pertumbuhan sektor industri pengolahan dan memberikan makna bahwa basis perekonomian Indonesia saat ini bertumpu pada sektor industri pengolahan. Lebih jauh lagi, sektor industri pengolahan memiliki hubungan besar dengan sektor pertanian dimana sektor ini merupakan penyumbang input antara terbesar bagi sektor pertanian. Dengan demikian, kemajuan pada sektor industri pengolahan akan serta merta memajukan sektor pertanian sebagai multiplier efeknya.This study aims to analyze the magnitude of the forward and backward linkages of the any sector with others. The data used in this study were data from Indonesia Input-Output Table Domestic Transaction on the Basic Prices Classification of 17 sectors aggregated into 9 sectors obtained from Central Bureau of Statistics Republic of Indonesia (BPS). The method of analysis data was using the input-output model whose calculations assisted by Microsoft Excel program. The results showed that processing industry sector was a greatest total forward linkage. For that, we can say that economics growth in Indonesia still having processing industry as a leading sector. Further, this sector was having a big relationship with agricultural sector which contributed as a bigest input for agriculture. In conclusion, any development in processing industri sector will be develop agricultural sector as multiplyer effect.

Global Value Chain Participation, Competition, and Markups: Evidence from Ethiopian Manufacturing Firms

This study uses detailed manufacturing census panel data for 2000 to 2014 to explore the relationship between Ethiopian firms’ global value chain (GVC) participation and markups. We find that GVC firms, defined as firms involved in both exporting and importing intermediate inputs, tend to have lower markups relative to non-trading firms and firms that are involved only in material imports. Moreover, the more intensely a firm is integrated into a GVC (measured by the share of export value added and imported inputs in total sales), the lower its markup is. Finally, we explore competition effects at the industry level and find that firms operating in industries with a relatively high GVC presence and suppliers selling inputs to such industries tend to have lower markups owing to horizontal competition and backward linkages, respectively. All of these findings suggest that GVC participation is associated with greater competition for Ethiopian firms.

Foreign direct investment and productivity spillovers: a firm-level analysis of Bangladesh in comparison with Vietnam

Foreign direct investment (FDI) is expected to generate external effects—usually termed FDI spillovers—for a host country, and these spillovers are thought to have consequences on the productivity of domestic firms. Despite this strong expectation, the empirical findings on FDI spillover are still indecisive. This study examines firm-level panel data to determine the effects of FDI spillover on firms’ productivity in Bangladesh in comparison to Vietnam. We consider both the horizontal and vertical (backward and forward) spillover effects of FDI. We find evidence that Bangladeshi firms gain productivity improvement through intra-industry or horizontal linkages, whereas Vietnamese firms gain through backward linkages. Our findings suggest that increases in foreign presence in the same industry for Bangladesh and in downstream industries for Vietnam are related with increase in output of domestic firms.

Leveraging Plastics Linkages for Diversification

The chapter considers the role of linkages, lead firm strategies, industrial policies, and value chain governance in the performance of the South African plastic products industry. The extent to which the linkages of the plastic products sub-sector backwards with the polymers industry, and forwards to plastic automotive components, have influenced the performance of the industry is assessed. The forward linkages to the automotive industry are assessed through a comparative assessment of technological capability accumulation in South Africa with its relatively more successful upper-middle-income counterpart, Thailand. The analysis shows that vertical integration and horizontal collaborations through clusters, as well as the different roles played by multinational corporations and the state, have exerted a stronger influence on the accumulation of capabilities in Thailand, compared with South Africa. The assessment of backward linkages to polymers shows how the linkage development in South Africa has been undermined by market power in the upstream polymers industry. This is coupled with a failure of industrial policy to support diversified industries such as plastic products, including through addressing the challenges related to input prices and supporting the accumulation of capabilities.

Diversifying a resource-dependent economy: private–public relationships in the Kuwaiti economy

The Kuwaiti economy is characterized by two major structural imbalances—heavy dependence on oil production and dominance of the public ownership. Kuwait has struggled over the years to implement a two-pronged development strategy —diversifying the country’s economic base away from the oil sector and promoting private sector development. This paper explores the economic impact of some policy reform options currently being considered. It employs a unique set of input–output tables, derived from supply–use tables, that distinguishes transactions made by private and public enterprises as well as providing a matrix of imports by industry. The public–private sector interdependence analysis revealed interesting results regarding sectoral differences in strengths of forward and backward linkages. For instance, the findings indicated that the strength of the publicly owned oil sectors lie in their forward linkages, supplying other sectors with their outputs, but their backward linkages is weak. On the other hand, the chemicals industry is identified as one of a few sectors with balanced and relatively strong forward and backward linkages in both public and private sector. The policy analyses conducted in this paper are highly relevant to the ongoing policy debate in Kuwait over the design of the economic reform programs. The public–private linkage analysis has revealed insights into policy synergies through which one instrument can affect more than one policy target.

Allocating fiscal stimulus during COVID-19 crisis based on sectoral linkages in Egypt for increasing growth and reducing unemployment

Purpose This paper aims to study the inter-sectoral linkages in the Egyptian economy, to increase the efficiency of allocating L.E 100bn fiscal stimulus package (FSP) to tackle the economic fallout from COVID-19 based on the strength of the backward and forward linkages of various sectors, and the values of both employment and value-added multipliers. The paper also measures the impact of the new FSP on the capability of various sectors in creating job opportunities and increasing economic growth. Design/methodology/approach The paper studies the intersectoral linkages by calculating backward and forward linkages index based on the latest input and output tables available for the Egyptian economy published in 2018. It also depends on a bivariate optimization model to distribute new investments allocated through the FSP based on the values of both employment and value-added multiplier for those sectors. The paper calculated both employment and value-added coefficients to measure the impact of the FSP on creating job opportunities and increasing growth rates. Findings Based on the results of the empirical analysis, both key sectors (with strong backward and forward linkages) and sectors with strong backward linkages have the highest impact on creating job opportunities and increasing growth rates in the Egyptian economy, which means that allocating FSPs in a way which targets those sectors, especially during economic crisis, could help in increasing the positive impacts of those packages. Originality/value The paper is based on the unbalanced growth theory of Hirschman and uses the empirical analysis to study the intersectoral linkages and allocate new investments through FSP through different sectors. The main policy implication of the empirical results of this paper suggests targeting the key sectors and the sectors with strong backward linkages during tough economic times related to COVID-19, to increase the positive impact of the package on the whole economy.