Inter-sectoral economic linkages in the Australian mining industry: Analysis using partial hypothetical extraction method

Fitsum S. Weldegiorgis, Evelyn Dietsche, Shabbir Ahmad, Daniel M. Franks and James Cust

Australian Journal of Agricultural and Resource Economics, 2023, vol. 68, issue 01

Abstract: The mining industry is not only one of Australia's main economic sectors but also one that the country is considered to have managed well. However, little is known about the industry's potential to contribute to the structural change of Australia's economy. We use the national input–output (IO) tables and apply the partial hypothetical extraction method (P-HEM) within both the Leontief and Gosh IO frameworks to examine the inter-sectoral linkages of the Australian mining and quarrying sector. Ee find that this sector demonstrates strong backward linkages (BL), but forward linkages (FL) appear to be weak, and they mainly involve non-metallic materials. The mining and quarrying sector appears to generate linkages with the business services sector and the construction sector, which can potentially contribute to diversifying the economy. Such linkages may be realised via skilling and reallocating skilled labour and technical supplier capacity as well as via developing physical infrastructure that supports existing and new economic sectors. We find that the identified linkage pathways via the construction sector are tied to energy-intensive but coal-dependent sectors. Thus, these pathways are vulnerable because of the climate-related need to move away from combusting coal and invest in cleaner sources of energy.

Keywords: Environmental Economics and Policy; Productivity Analysis (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aareaj:343072

DOI: 10.22004/ag.econ.343072

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