The Roles of Steel Industries in the National Economy: The Case of Japan

Abstract

The purpose of this study is to analyze the roles of steel industries in the national economy of Japan. This study employs Input-Output (IO) analysis as an analysis apparatus. More specifically, this study uses the parts of IO analysis, namely simple output multiplier, simple household income multiplier, index of the power of dispersion, and index of the sensitivity of dispersion as analysis instruments. The analysis period of this study is from 1985 through 2005. In this study, the analyzed sectors are (1) pig iron and crude steel, (2) steel products, and (3) steel castings and forgings, and other steel products. The results show that, by using simple output multiplier, one can say that one of the analyzed industries, steel products, attracted consistently the Japanese economy on the analysis period. The same attractiveness could be observed on pig iron and crude steel sector from 1985 through 1995. Meanwhile, by using both indices, one can claim that the analyzed industrial sectors had a consistent pattern regarding the quadrant location on the period of analysis. More specifically, pig iron and crude steel, and steel products sectors were in quadrant I from 1985 through 2005 while steel castings and forgings, and other steel products sector lied in quadrant IV on the same period. Based on these quadrant positions, one can say that the analyzed industries had strong effects on the entire Japanese industries on the analysis period.