Central Industries in the Ecuadorian Input–Output Network. An Application of Social Network Analysis

Abstract

AbstractThe present study identifies the most influential industries in Ecuador according to the Input–Output Table for 2019. For this purpose, four weighted centrality indices are used from Social Network Analysis: Degree Centrality, Closeness Centrality, Betweenness Centrality, and Alpha Centrality. The results suggest that wholesale and retail trade, transportation, and professional activities are the most influential in the Ecuadorian economy due to their high centrality in commercial relationships. According to Chenery and Watanabe's methodology, all are base sectors, that is, they mainly are supply-driven. So, these centrality measures highlight the relevance of sectors based on their forward linkages. This result is not surprising. The theory of shock diffusion suggests that productive shocks on high centrality sectors can spread cascading effects downstream and generate aggregate fluctuations.