Extending construction linkage measures by the consideration of the impact of capital

Abstract

Construction linkage is a well‐established research field. However, a significant limitation in previous linkage research is that the flow of capital goods is not addressed. Using the OECD input–output tables, this research first generates a new input–output model considering capital as an intermediate factor. Using the new model, the construction linkages are recalculated and investigated in order to evaluate further the role of construction in national economies. The findings verify that traditional construction linkages were extremely underestimated in previous research. Furthermore, the effect of capital on construction shows a declining trend over the examined period. After considering the effect of capital, most values and rankings of backward and forward linkages show a decreasing trend, which confirms the declining role of the construction sector with economic maturity.

Keywords:

• Construction sector
• input–output analysis
• capital
• linkages

Acknowledgements

The authors would like to thank the anonymous referees for their insightful suggestions and valuable comments on an earlier version of the paper.