Intermediate inputs and industry studies : input-output analysis

This chapter provides a literature overview on the use of input-output (I-O) analysis in efficiency and productivity measurements. The exposition covers both the traditional I-O modeling framework and its extension to frontier-based I-O approach that adds elements of frontier analysis into the traditional I-O framework, thus utilizing advantages of both techniques. Accounting for intermediate inputs is especially important in the current economic conditions that are characterized by increased volumes of international trade in intermediate inputs and growing environmental pressures, posing challenges to performance measurement. Therefore, the chapter also provides a discussion of empirical applications of I-O framework in international and interregional trade, environmental studies, and policy scenario analyses.