THE MEASUREMENT OF INTERINDUSTRY LINKAGES - KEY SECTORS IN THE NETHERLANDS

The present paper proposes a new method for the measurement of sectoral interdependencies. It is shown that the elements of the eigenvector corresponding to the dominant eigenvalue of a matrix may be used for measuring interindustry linkages. In an empirical study, the eigenvector method is compared with the two methods that are usually applied. Linkage indicators and key sectors are determined for the Netherlands for the entire post-war period 1948-84. The results show that the eigenvector method provides a better measurement of the interindustry linkages, that it is useful in detecting clusters of sectors, and that it is sensitive to changes in the structure of the economy.