Production Chains in an Interregional Framework: Identification by Means of Average Propagation Lengths

Abstract

When linkages between industries are studied from the perspective of production chains, sequencing is important. In this respect, both the strength of the linkages and the distance between industries are relevant. Distance is measured by the average propagation length, defined as the average number of steps it takes a stimulus in one industry to propagate and affect another industry. Using the 1985 intercountry input-output table for six European countries, we present three applications. These are, visualizing the production structure by graphing its production chains, analyzing intercountry linkages between industries, and determining the role that each country plays within the system.