National Statistics, Republic of China (Taiwan)

Why most of the backward linkage coefficients for the Services are lower than those for Manufacturing?

1. Discrepancies in backward linkage between Services and Manufacturing mainly derived from differences in industry characteristics.

2. Manufacturing focuses on the manufacture of tangible products, and inputs large amounts of raw materials. Because Manufacturing production processes can be divided into several parts and outsourced to different production units, so the intermediate input rate and backward linkage are higher. In contrast, Services focus on the provision of services, and is characterized by the simultaneous occurrence of production and consumption. Moreover, because it is not easy to divide Services production processes into several parts, so the consumption of raw materials and supplies during the service process is lower than Manufacturing. As a result, when demand increases in Services, the impact in other industries final usually tends to be lower than in Manufacturing industries.