Abstract
This study provides a tentative explanation of the spatial distribution of economic activity in Canada, with a focus upon the role of inter-industry linkages. Location of economic activity for each of one hundred and nine three-digit S.I.C. manufacturing industries is explained by use of a “tobit” model incorporating backward and forward linkage variables. The two sets of linkage variables in each tobit equation were reduced by extraction of one principal component from each set, using the matrix of cosines of the variables. A set of control variables completes the set of explanatory variables. The overall explanatory power of our equations was remarkably high and the role of inter-industry linkages is unmistakable.
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Oksanen, E.H., Williams, J.R. Industrial location and inter-industry linkages. Empirical Economics 9, 139–150 (1984). https://doi.org/10.1007/BF01973319
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DOI: https://doi.org/10.1007/BF01973319