The Identification of Up- and Downstream Industries using Input–Output Tables and a Firm-level Application to Minority Shareholdings
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Olivia A. Bodnar
Abstract
We present a method for identifying up- and downstream industries in inter-industry datasets via input–output tables. We apply this approach to aggregated European input–output data and present results on identified industry links and their sensitivity to threshold definitions. We furthermore test the time-consistency of the up- and downstream assignments based on input–output tables, and discuss the limitations of this method. Finally, the method is used to test anti-competitive effects of non-controlling minority shareholdings.
Appendix
A.1 Industry classification and indirect links
NACE Rev. 2 Industry Classification.
| 2-digit Code | Description |
| 01 | Crop and animal production, hunting and related service activities |
| 02 | Forestry and logging |
| 03 | Fishing and aquaculture |
| 05 | Mining of coal and lignite |
| 06 | Extraction of crude petroleum and natural gas |
| 07 | Mining of metal ores |
| 08 | Other mining and quarrying |
| 09 | Mining support service activities |
| 10 | Manufacture of food products |
| 11 | Manufacture of beverages |
| 12 | Manufacture of tobacco products |
| 13 | Manufacture of textiles |
| 14 | Manufacture of wearing apparel |
| 15 | Manufacture of leather and related products |
| 16 | Manufacture of wood and of products of wood and cork, except furniture; |
| manufacture of articles of straw and plaiting materials | |
| 17 | Manufacture of paper and paper products |
| 18 | Printing and reproduction of recorded media |
| 19 | Manufacture of coke and refined petroleum products |
| 20 | Manufacture of chemicals and chemical products |
| 21 | Manufacture of basic pharmaceutical products and pharmaceutical preparations |
| 22 | Manufacture of rubber and plastic products |
| 23 | Manufacture of other non-metallic mineral products |
| 24 | Manufacture of basic metals |
| 25 | Manufacture of fabricated metal products, except machinery and equipment |
| 26 | Manufacture of computer, electronic and optical products |
| 27 | Manufacture of electrical equipment |
| 28 | Manufacture of machinery and equipment n.e.c. |
| 29 | Manufacture of motor vehicles, trailers and semi-trailers |
| 30 | Manufacture of other transport equipment |
| 31 | Manufacture of furniture |
| 32 | Other manufacturing |
| 33 | Repair and installation of machinery and equipment |
| 35 | Electricity, gas, steam and air conditioning supply |
| 36 | Water collection, treatment and supply |
| 37 | Sewerage |
| 38 | Waste collection, treatment and disposal activities; materials recovery |
| 39 | Remediation activities and other waste management services |
| 41 | Construction of buildings |
| 42 | Civil engineering |
| 43 | Specialised construction activities |
| 45 | Wholesale and retail trade and repair of motor vehicles and motorcycles |
| 46 | Wholesale trade, except of motor vehicles and motorcycles |
| 47 | Retail trade, except of motor vehicles and motorcycles |
| 49 | Land transport and transport via pipelines |
| 50 | Water transport |
| 51 | Air transport |
| 52 | Warehousing and support activities for transportation |
| 53 | Postal and courier activities |
| 55 | Accommodation |
| 56 | Food and beverage service activities |
| 58 | Publishing activities |
| 59 | Motion picture, video and television programme production, sound recording |
| and music publishing activities | |
| 60 | Programming and broadcasting activities |
| 61 | Telecommunications |
| 62 | Computer programming, consultancy and related activities |
| 63 | Information service activities |
| 64 | Financial service activities, except insurance and pension funding |
| 65 | Insurance, reinsurance and pension funding, except compulsory social security |
| 66 | Activities auxiliary to financial services and insurance activities |
| 68 | Real estate activities |
| 69 | Legal and accounting activities |
| 70 | Activities of head offices; management consultancy activities |
| 71 | Architectural and engineering activities; technical testing and analysis |
| 72 | Scientific research and development |
| 73 | Advertising and market research |
| 74 | Other professional, scientific and technical activities |
| 75 | Veterinary activities |
| 77 | Rental and leasing activities |
| 78 | Employment activities |
| 79 | Travel agency, tour operator and other reservation service and related activities |
| 80 | Security and investigation activities |
| 81 | Services to buildings and landscape activities |
| 82 | Office administrative, office support and other business support activities |
| 86 | Human health activities |
| 87 | Residential care activities |
| 88 | Social work activities without accommodation |
| 94 | Activities of membership organisations |
| 95 | Repair of computers and personal and household goods |
| 96 | Other personal service activities |
Summary statistics of indirect up- and downstream assignments.
| Cutoff | Number of vertical links | Number of vertically linked industries | ||
| (Percentage of all possible links | (Percentage of all industries in parentheses) | |||
| in parentheses) | c | |||
| Upstream | Downstream | Both | ||
| 3% | 1,565 | 27 | 0 | 52 |
| (0.32) | (34.18) | (0.00) | (65.82) | |
| 5% | 552 | 37 | 1 | 37 |
| (0.11) | (46.84) | (1.27) | (46.84) | |
| 10% | 72 | 29 | 12 | 8 |
| (0.01) | (36.71) | (15.19) | (10.13) | |
Note: The sample covers 493,039 triangular relationships between 79 different industries.
Summary statistics for the firm dataset (2006–2013).
| Transaction variables | ||||
| Shareholder-level | Target-level | |||
| No. of obs. | % | No. of obs. | % | |
| Upstream transaction | 1,945 | 0.04 | 1,159 | 0.03 |
| Downstream transaction | 1,387 | 0.03 | 1,175 | 0.03 |
| Horizontal transaction | 4,681 | 0.10 | 2,748 | 0.06 |
| Vertical transaction | 12,021 | 0.27 | 10,658 | 0.24 |
| Considering secondary industries | ||||
| Upstream transaction | 2,703 | 0.06 | 1,710 | 0.04 |
| Downstream transaction | 2,207 | 0.05 | 1,899 | 0.04 |
| Horizontal transaction | 13,302 | 0.30 | 14,839 | 0.33 |
| Other variables | ||||
| Mean | Std.dev. | Min. | Max. | |
| Lerner index | 0.96 | 0.08 | 0.00002 | 1 |
| Turnover (mill. EUR) | 20.77 | 348.47 | 0.001 | 163,000 |
| Age (years) | 19.39 | 15.68 | 1 | 896 |
| Group member | 0.35 | 0.48 | 0 | 1 |
Note: The number of firm-year observations for all variables is 4,467,488.
A.2 Data preparation
For the financial data, the Orbis version as of June 2015 was used, and all European firms with a turnover of at least 2 million EUR in at least one year during the observation period and an available unconsolidated account were extracted for 2006–2013. The sample covers firms from NACE 2-digit industries 01 to 82 (without financial services) and EU-28 countries without Cyprus and Malta. In contrast to the Monopolies Commission, we conduct our analysis for a sample including firms from Germany, Austria, and the UK.
Historic shareholder information stems from the Orbis company ownership module and was merged to firm IDs both on shareholder and on target level. Therefore, at the target firm level only capital links can be considered whose shareholders are located within the EU-28 countries. Shareholdings of institutional investors and natural persons were not considered. A detected minority shareholding in in year
The Lerner index variable was restricted to values between zero and one, whereas all values below zero were treated as zero values. Particularly with regard to panel analyses, a careful preparation of the Orbis database is needed. Therefore, observations with asymmetric observations–-which is observations with non-missing information for the outcome variable, but missing information for control variables or vice versa–-were excluded. Furthermore, all firms with inconsistent missing values were dropped from the unbalanced sample. Inconsistency here refers to cases in which missing values occur in between reported figures and thus are unlikely to be caused by a firm’s inactivity. Missing information can also occur in years in which firms had not been established or already had exited the market: these observations remain in our unbalanced sample. Moreover, only firms with at least three consecutive observations were kept in the sample.
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Article note
The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors and should not be attributed in any manner to their employers or affiliations.
© 2017 Oldenbourg Wissenschaftsverlag GmbH, Published by De Gruyter Oldenbourg, Berlin/Boston
Articles in the same Issue
- Frontmatter
- Original Articles
- Does Banknote Quality Affect Counterfeit Detection? Experimental Evidence from Germany and the Netherlands
- The Identification of Up- and Downstream Industries using Input–Output Tables and a Firm-level Application to Minority Shareholdings
- Book Review
- The World Trade System: Trends and Challenges
- Data Observer
- The Establishment History Panel – Redesign and Update 2016
- Annual Reviewer Acknowledgement
- Annual Reviewer Acknowledgement
Articles in the same Issue
- Frontmatter
- Original Articles
- Does Banknote Quality Affect Counterfeit Detection? Experimental Evidence from Germany and the Netherlands
- The Identification of Up- and Downstream Industries using Input–Output Tables and a Firm-level Application to Minority Shareholdings
- Book Review
- The World Trade System: Trends and Challenges
- Data Observer
- The Establishment History Panel – Redesign and Update 2016
- Annual Reviewer Acknowledgement
- Annual Reviewer Acknowledgement
