1. Inter-sectoral Production Linkages in Slovenia: An Input-Output Analysis Daniela Muhaj – Johns Hopkins University Uroš Geršak – Banka Slovenije September 2015 Views and conclusions expressed in this presentation should not be taken to represent the view of Banka Slovenija.

2. 2 Agenda Research Project Data Overview Results – Multipliers – Key Sector – Multiplier Product Matrix Key Findings Future Research

3. 3 Research Project Motivation – “Data gossiping” or “data analysis”? – Network analysis, input-output tables, financial flows Objective – Understanding the causes and effects of the financial crisis on Slovenian enterprises from a real and financial perspective Structure – Three part project: Macro-Real Micro-Enterprise Real-Financial

4. 4 Data Sources Symmetric IO tables 2005, 2009 and 2010 Methodology: ESA 1995 data Classifications CPA 2002 / Nace Rev. 1.1 (2005) CPA 2008 / Nace Rev. 2 (2009 & 2010) Bridge tables - Aggregated (6 industries) - By section (13 industries) - By division (60 industries / 64 industries)

5. 5 Data Overview

6. 6 Domestic production

7. 7 Total output, intermediate cons., valued added Data Overview

8. 8

9. 9 Results: Multipliers Column1 AgricultureManufacturingConstructionTrade Business services Other Output multiplier 20051.57171.47991.99861.57881.42901.3491 20091.62981.64652.08191.62171.40931.3600 20101.57241.61302.11891.62561.41491.3560 Imported goods and services m. 20050.19150.48740.31790.19010.10540.1158 20090.19890.41710.27740.18150.11570.1176 20100.21260.46410.30160.19910.12120.1255 Value added multiplier 20050.78640.50200.64350.78350.87470.8386 20090.77090.57160.69360.79190.86590.8369 20100.76300.52520.67360.77500.86040.8289 Multiplier Analysis: Output, Imports & Value Added

10. 10 Results: Impact Analysis / Input coeff. stability Multiplier Analysis: Impact Analysis & Input Coefficient Stability – Total output vs. Calculated Output (based on input coefficients)

11. 11 Results: Key Sector Understanding the model – Forward linkages Interconnection of a sector with the “upstream” sectors from which it purchases inputs Direction of causation in the demand-side model – Backward linkages Interconnection of a sector with the “downstream” sectors to which it sells output Direction of causation in the supply-side model Evaluating economic connectedness – Mechanism for identifying “key” or leading sectors Possibility of studying the evolution of inter-sectoral connectedness

12. 12 Results: Key Sector Backward linkages oriented: Construction Forward linkages oriented: Business Services & Manufacturing – Trade* Weakly linkages oriented: Agriculture

13. 13 Results: Multiplier Product Matrix

14. 14 Results: Multiplier Product Matrix Visualization technique capturing structural economic changes Descending rank-sized hierarchies − Calculated from backward & forward linkages Interpretation of the diagrams − Bar height captures the strength of the inter-sectoral relationship − 2005 layout is superimposed on 2009 & 2010 landscapes

15. 15 Results: Multiplier Product Matrix

16. 16 Results: Multiplier Product Matrix

17. 17 Results: Multiplier Product Matrix

18. 18 Results: Key Findings Construction sector has strong and consistent inter-sectoral linkages Most robust backward linkages with manufacturing, business services and trade Respectively the top three sectors providing inputs to construction Manufacturing has the strongest forward linkages with construction and trade

19. 19 Results: Key Findings There is no key sector in Slovenia – However, construction has consistently been an important sector Construction activities are highly interdependent with activities of other sectors for inputs. Observed structural change in the Slovenian economy – Fluctuations of inter-sectoral relationships Sectoral production is highly sensitive to changes in other sectors’ output

20. 20 Future Research Consolidate the industry classification systems – Comparable results at the disaggregated level Complete the rest of the macro analysis – Impact analysis – Extraction method Incorporate Network Analysis – Visualizing the inter-sectoral linkages over time Constant prices data Disaggregated data Expand the analysis at the enterprise micro level – Use balance sheet data for survival analysis Connect the real and financial effects of the crisis in Slovenia – Financial flow data and contagion analysis

21. Inter-sectoral Production Linkages in Slovenia: An Input-Output Analysis Daniela Muhaj – Johns Hopkins University Uroš Geršak – Banka Slovenije September 2015 Views and conclusions expressed in this presentation should not be taken to represent the view of Banka Slovenija.