Derivation of Product-by-product 10 Matrices with the Almon’s Algorithm and Treatment of Secondary Production

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А С Т Л U N I V E R S I T A T I S L O D Z I E N S I S ______ FOLIA O EC O N O M IC A !98, 2006

Reelika Parve*

D E R IV A TI O N OF P R O D U C T - B Y -P R O D U C T IO

M AT RI CES W IT H THE A L M O N ’S A L G O R I T H M

AND T R E A T M E N T OF S E C O N D A R Y PR O D U C T IO N

I. I N T R O D U C T I O N I lie E u r o p e a n S y s t e m o f N a ti o n a l a n d R e g io n a l A c c o u n t s , c o m m o n l y r e ferred to a s Es a 9 5 , in t r o d u c e d b y E u r o p e a n C o u n c i l R e g u l a t i o n N o. 2 2 2 3 / 9 6 o f 25 J u n e 1996 a n d in f o r c e f r o m 3 0 A p ril 1999, h a s e s t a b l i s h e d a c o m p u l s o r y d e livery o f s ta tis t ic s f o r t h e EU m e m b e r s . In p a r ti c u la r, th e N a t i o n a l S ta tistic a l O f fices h a v e to p r o v i d e fiv e ta bles: th e s u p p l y t a b le s h o w i n g t h e s u p p l y o f g o o d s an d s e r v i c e s by p r o d u c t a n d b y t y p e o f s u p p li e r ; t h e u s e t a b l e th a t d e s c r i b e s th e d e m a n d for th e o u t p u t b y i n d u s t r i e s a n d final d e m a n d s e c t o r s a c r o s s th e c o m m o d it y r o w s , th e s y m m e t r i c i n p u t - o u t p u t ta b le ( S I O T ) c o n s t r u c t e d fro m th e p r e v io u s o n e s a n d th e sp lit o f th e la tte r into d o m e s t i c p r o d u c t i o n a n d im p o r ts . In a d d i t i o n , th e M e m b e r S ta te s h a v e to t r a n s m it th e t a b le s li n k i n g t h e s u p p l y an d u se ta b le s ( S U T s ) to th e s e c t o r a c c o u n t s .

The S U T s t r a n s m i t t e d to E u r o s t a t a r e p u b l i s h e d in a s t a n d a r d b u t q u i t e l i m ited f o rm a t: b o th ta b le s d i s t i n g u i s h 60 in d u s t rie s a n d 6 0 p r o d u c t s ' . T h e b r a n c h e s a r e c l a s s i f i e d a c c o r d i n g to th e N a c e R e v is io n 1 (N o m e n c la tu re g e n e ra te des A c  tivities econom ic/ues d a n s les C o m m u n a u tes E u ro p e en n es), w h i l e th e c l a s s i f i c a tio n u s e d f o r p r o d u c t s a n d s e r v i c e s is th e CPA, C l a s s i f i c a t i o n o f P r o d u c t s b y A c tivity. T h e s e t w o n o m e n c l a t u r e s a r e p e r f e c tly a l ig n e d to e a c h o t h e r s o th a t at e v e r y level o f a g g r e g a t i o n , th e Cp a id e n tifie s th e p r in c i p a l p r o d u c t o f th e in d u s try a c c o r d i n g to th e N a C E R ev. I 2. T h e s y m m e t r i c i n p u t - o u t p u t ta b le, in te g r a te d w ith t h e n a t i o n a l a c c o u n t s , p la y s a l e a d in g r o le in th e r e p r e s e n t a t i o n o f th e r e l a t i o n s o f i n t e r d e p e n d e n c e

University o f Florence, Italy.

' The last item Services provided by extra-territorial organizations and bodies - is, often, not reported.

C p a is structurally linked to N a c e Rev. I through the industrial origin criterion. Each product is assigned to one and only one N a c k Rev.l activity and is classified according to the activity which characteristically produces it.

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a m o n g th e e c o n o m i c o p e r a t o r s o f a c o u n t r y . T h e S I O T s c a n b e d i v i d e d in to tw o s u b g r o u p s : t h e y c a n b e d e f i n e d a s i n d u s t r y - b y - i n d u s t r y o r p r o d u c t - b y - p r o d u c t . T h e E s a 95 d o e s not p r o v i d e e x h a u s t i v e i n d ic a t io n s for th e c o m p i l a t i o n o f s u p ply a n d u s e t a b l e s o r in p u t- o u t p u t tables. E v e n th o u g h th e E s a 95 e x p l a i n s the c o m p i l a t i o n o f th e p r o d u c t - b y - p r o d u c t S I O T a n d th e E u r o s t a t ’s I n p u t - O u t p u t M a n u a l ( 2 0 0 1 ) p o i n t s o u t th a t “ p r o d u c t - b y - p r o d u c t t a b le s a r e g e n e r a l l y m o r e h o m o g e n e o u s in th e i r d e s c r i p t i o n o f th e tr a n s a c t i o n s t h a n in d u s t r y - b y - i n d u s t r y t a b l e s ” (p. 2 2 4 , E u r o s ta t 2 0 0 1 ) , N a ti o n a l S tatistic al O f f i c e s a r e a l l o w e d to d i f f u se th e ir S I O T b o th o f d i m e n s i o n p r o d u c t - b y - p r o d u c t a n d in d u s t r y - b y - i n d u s t r y . T h e r e f o r e t h o u g h th e tr a n s m i s s i o n p r o g r a m m e o f t h e E s a 9 5 r e q u i r e s to c o m p i l e p r o d u c t - b y - p r o d u c t ta b le s , at th e m o m e n t th e ir d e r i v a t i o n r e m a i n s j u s t a r e c o m m e n d a t i o n (§ 22 E u r o s t a t 2 0 0 2 ) 3. T h e c o n s t r u c t i o n o f in p u t- o u t p u t ta b le s r e p r e s e n t s a s o u n d t r a d i tio n fo r the W e s t e r n E u r o p e a n c o u n t r i e s ; th e n e w M e m b e r s o f th e E u r o p e a n U n i o n h a v e r a t h e r little e x p e r i e n c e in t h e c o m p i l a t i o n o f th is k in d o f t a b le s a n d r e l e v a n t e x p e r i e n c e w ith s u r v e y s o f g o o d s a n d s e r v ic e s is la rg e ly la c k in g . In s ig h t o f the a d h e s i o n to th e E u r o p e a n U n io n , th e c a n d i d a t e c o u n t r i e s h a d to a d o p t t h e E u r o p e a n S y s t e m o f A c c o u n t s a n d to b r i n g th e ir m e t h o d o l o g i e s , d e f i n i t i o n s , n o m e n c l a t u r e s a n d a c c o u n t i n g m e t h o d s into line w ith t h o s e o f t h e E U . T h e ten n e w M e m b e r s w e r e n o t o b li g e d to d e l i v e r b e f o r e M a y 2 0 0 4 w h e n t h e y h a v e j o i n e d the U n io n . A s th e f o r m e r E U 15 c o u n t r i e s , th e n e w M e m b e r S ta te s a r e r e q u i r e d to t r a n s m i t to E u ro s ta t , w ith in c e r ta in d e a d l i n e s 4, th e a c c o u n t s a n d t a b le s c o m p ile d in a c c o r d a n c e w ith th e Es a 95. A lt h o u g h the a d m i t t e d c o u n t r i e s h a v e a c q u i r e d r a p id l y th e a b i liti e s a n d th e c o m p e t e n c e s n e c e s s a r y to c a r r y o u t th e s e t a sk s, at le a s t a t t h e m o m e n t , in s o m e c o u n t r i e s s o m e la c k s o f c o n s i s t e n c y and in te g r a t i o n b e t w e e n th e ta b le s a n d th e n a t io n a l a c c o u n t s a r e o b s e r v e d . T h e c o m p u t a t i o n o f th e S I O T c o n s i s t s b a s ic a lly in th e c o n v e r s i o n o f the s u p p l y a n d u se t a b le s v a l u a t e d at b a s ic price s. T h e c o m p i l a t i o n o f t h e S U T s a n d t h e S I O T a r e in te r r e la t e d p r o c e s s e s a n d s h o u ld n o t b e is o la te d . In fact, a s i n d i c a te d b y E u ro s ta t , th e d e r i v a t i o n o f th e S I O T s h o u l d r ev e al i n c o n s i s t e n c i e s a n d i n a c c u r a c i e s in th e S U T s (§ 21 E u r o s ta t 2 0 0 2 ) . T h e t r a n s f o r m a t i o n o f th e S U T s in to the S I O T o c c u r s o n th e b a s is o f o n e o f the f o l l o w i n g a p p r o a c h e s : p r o d u c t t e c h n o l o g y a s s u m p t i o n , o r i n d u s t r y t e c h n o l o g y a s s u m p t i o n . T h e E s a 95 d e s c r ib e s , e v e n r a t h e r b r ie f ly , b o th a l te r n a t i v e s w ith r e g a r d to th e tr a n s f e r o f p r o d u c t s a n d r e la te d in p u ts , a n d p o i n t s o u t th a t the c h o i c e d e p e n d s o n “ th e s tr u c t u r e o f n a tio n a l in d u s t rie s , e.g. th e d e g r e e o f s p e c i a li z a tio n , a n d o n th e h o m o g e n e i t y o f th e n a t io n a l t e c h n o l o g i e s u s e d to p r o d u c e

"The Eurostat Input-Output Manual in the Framework o f the ESA95", supporting paper submitted by Eurostat on the Joint ECE/Eurostat/OECD Meeting on National Accounts (Geneva. 24-26 April 2002).

4 The Supply and Use tables (SUT) must be compiled annually, the SIOT has to be transmitted every 5 years.

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p r o d u c t s w i t h i n th e s a m e p r o d u c t g r o u p ” (§ 9 . 5 8 E u r o s t a t 1996). U s u a l l y , N a tio nal in s t itu te s o f s t a tis t ic s d o not r e v e a l w h i c h o f th e t w o m e t h o d s h a s b e e n a d o p t e d for th e c a l c u l a t i o n o f th e S I O T 5. A m o r e i n - d e p t h d e s c r i p t i o n o f t h e s e t w o m e t h o d s c a n b e f o u n d in th e C h a p ter 11 o f E u r o s t a t ’s I n p u t - O u t p u t M a n u a l ( 2 0 0 1 ) . D i f f e r e n t t y p e s o f s e c o n d a r y p r o d u c t i o n ( s u b s i d i a r y p r o d u c ts , b y - p r o d u c t s a n d j o i n t - p r o d u c t s ) a r e d w e l l e d u p o n a n d a lot o f s p a c e is g i v e n to p o in t up t h e m a in m e t h o d s , a s w e ll a s the m ix e d t e c h n o l o g y a s s u m p t i o n , i d e n tif y in g a d v a n t a g e s a n d d r a w b a c k s o f e a c h a l t e r n a t i v e s o l u t i o n . T h e p r o b l e m o f th e n e g a t i v e c o e f f i c i e n t s a s s o c i a t e d to th e a p p l i c a t i o n o f t r a d i tio n a l p r o d u c t t e c h n o l o g y is e x p l a i n e d w i t h r e q u i r e d c o m p le te n e s s a n d p r e c i s i o n , th e m a i n c a u s e s o f the a p p e a r a n c e o f n e g a t i v e s a r e in v e s tig a te d a n d s o m e s o l u t i o n s a r e p u t f o r w a r d . In o r d e r to c a l c u l a t e a p r o d u c t - b y - p r o d u c t v a r i a n t o f th e S I O T tw o p r o c e d u r e s a r e illu s tr a te d : m a t r i x m u l t i p l i c a tio n (§ 1 1.4.2.1) a n d A l m o n ’s m e t h o d (§ 11.4.2 .2). E u r o s t a t d o e s n o t h a v e a p r e f e r e n c e f o r a n y p a r t i c u l a r m e th o d a s s e r tin g th a t “ in t e r m s o f c o m p u t i n g tim e, b o th m e t h o d s a r e e q u i v a l e n t . I f w e l l - p r o g r a m m e d , b o t h m e t h o d s c a n b e ea sy to u s e , a l t h o u g h fo r b o th it r e m a i n s n e c e s s a r y to a d d r e s s t h e la r g e s t n e g a tives m a n u a l l y ” (p. 2 3 6 ). B o th m e t h o d s r e q u i r e a final b a l a n c i n g by R A S p r o c e d u r e as th e A l m o n ’s m e t h o d “ le a v e s th e r o w to ta ls u n a f f e c t e d , b u t t h e re is no g u a r a n t e e tha t the c o l u m n to ta ls a r e m a i n t a i n e d ” . f h e f o l l o w i n g p a p e r is o r g a n i s e d a s fo llo w s: s e c t i o n 2 d e s c r i b e s th e r e s u lt s of the a p p l i c a t i o n o f th e p r o d u c t - t o - p r o d u c t a l g o r i t h m to a s e l e c t e d g r o u p o f c o u n t r i e s u s i n g P T P p r o g r a m c o n c e i v e d a n d i m p l e m e n t e d b y A l m o n . T h i s m e t h o d h a s b e e n trie d o n t h e d a t a o f s o m e o ld EU M e m b e r s t a te s (Ita ly , S p a in , S w e d e n ) , s o m e n e w M e m b e r s ( E s to n ia , L a t v ia a n d P o la n d ) , a s w e ll a s T u r k e y , a c a n d i d a t e f o r t h e EU. In c h a p t e r 3 s o m e c o n c l u s i o n s a r e f o r m u l a t e d . II. A N A L Y S I S O F T H E F I R S T R E S U L T S O F T H E P T P

(PRO D U C T- TO -PRO D I! C l')

A P P L I C A T I O N 2.1 P r e p a r a t i o n o f d a t a F o r a p r o p e r d e r i v a t i o n o f s y m m e t r i c in p u t - o u t p u t t a b le s f r o m th e s y s t e m o f s u p p ly a n d u s e t a b l e s b o th m a t r i c e s m u s t b e e x p r e s s e d at b a s ic p rice s. In th e t r a n s m i s s i o n p r o g r a m o f d a ta f o r the M e m b e r s o f t h e E U th e s u p p l y ta b l e o f g o o d s a n d s e r v i c e s is g iv e n at b a s ic p rice s, b u t t h e u s e t a b l e is v a l u e d at p u r

ln the introduction to the sym metric input-output tables o f 1995 and 2000 at basic prices published by the Sweden Statistical Office it is announced that the tables were calculated on the basis o f industry-technology assumption. The ISTAT, in Italy, too, revealed that they had used the industry-technology assumption.

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c h a s e r s ’ p rice s. T h e t r a n s f o r m a t i o n o f ta b le s a t b a s ic p r i c e s into p u r c h a s e r s ’ p r ic e s i n v o l v e s r e a l l o c a t i n g o f t r a d e a n d t r a n s p o r t m a r g i n s as w ell as n e t ta x e s o n p r o d u c t s ( ex c l. d e d u c t i b l e V at). At p r e s e n t, m o s t S ta tis tic a l O f f i c e s d o n o t p u b lish a n y t a b le o t d i s t r i b u t i v e m a r g i n s . F o r s u c h a r e a s o n , it w a s n ’t p o s s i b l e to t r a n s f o r m th e u s e t a b ic o f m o s t c o u n t r i e s in to b a s ic p ric e s . O n l y E s t o n i a h a s p u b l i s h e d tw o u s e ta b le s - o n e at u sua l p u r c h a s e r s ’ p r ic e s a n d th e o t h e r at b a s ic p r ic e s - a n d L a t v ia h a s m a d e a v a i l a b l e a t a b l e o f d i s t r i b u t i v e m a r g i n s . T h e r e f o r e t h e s u p p l y a n d u s e t a b le s u s e d fo r th e c o m p i l a t i o n o f th e S I O T a r e n o t p e r f e c tly c o h e r e n t b e c a u s e o f th e d i f f e r e n t v a l u a t i o n s y s t e m s b u t it w a s s u p p o s e d th at p r o b a b l y it s h o u l d n o t h a v e a s u b s t a n tia l im p a c t o n the results.

M o s t set o f t a b le s a r e c o m p i l e d at c u r r e n t p r ic e s o n ly . A c c o r d i n g to the C o m m i s s i o n D e c i s i o n 9 8 / 7 1 5 , EU M e m b e r S ta te s a r e s u p p o s e d to d e r i v e real te rm s e r ie s in p r ic e s o f t h e p r e v i o u s y e a r ( th e tr a n s i tio n a l p e r i o d lo r the a p p l i c a t i o n o f th e C o m m i s s i o n D e c is io n w ill e n d in 2 0 0 5 ) . A t p r e s e n t , o n ly th e S tatistic al O f f i c e o f S w e d e n m a k e s a v a ila b le , u p o n r e q u e s t, a set o f s u p p l y a n d u s e t a b le s at ( t - 1 ) price s.

A t i m e s e r ie s is a v a i l a b l e f o r Italy ( 1 9 9 5 - 2 0 0 0 ) a n d S w e d e n ( 1 9 9 5 - 2 0 0 1 ) , L a tv ia s u b m i t t e d just tw o ta b le s ( 1 9 9 7 - 1 9 9 8 ) a n d all th e o t h e r c o u n t r i e s had s u p p l y a n d u se t a b l e s for o n e y e a r on ly . T h e m e t h o d w a s trie d o n o n e y e a r o n ly p e r c o u n t r y , s i n c e it g a v e a q u i t e g o o d id e a o f g e n e r a l p r o b l e m s o n e c o u l d r u n into.

T h e ta b l e 1 c o n t a i n s m a in in f o r m a t i o n o n th e tables.

T a b l e I

Country Tables Notes

1 2 ₃

POLAND 1995 Supply: Basic prices

Use: Producers’ prices

58 industries/ products

Not indicated uranium and thorium ores Currency: Polish zloty

TURKEY 1996 Supply: Producers’ prices Use: Producers’ prices

Industries and products not indicated: extraction ol uranium and thorium ores, secondary raw ma terials, services auxiliary to financial interm edia tion, sewage and refuse disposal services, private households w ith employed persons.

Table o f trade and transport margins available; matrix o f net taxes on products missing. Currency: millions o f Turkish lira (TL) con verted in billions o f TL.

ESTONIA 1997 Supply: Basic prices Use: 1) Basic prices;

2) Purchasers’ prices

The extraction o f coal, peat, oil shale, natural gas and crude petroleum (4 -5 ) form a single item. Not present uranium and thorium ores and pri vate households with employed persons Currency: millions o f Estonian kroons (EEK)

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Table 1 (cont.)

1 2 ₃

1. AT VIA 1997 1998

Supply: Basic prices Use: Purchasers' prices

In 1997 59 industries and 61 products; in 1998 59 industries and 60 products (private household with employed persons no more reported). Table o f trade and transport margins and the ta ble o f net taxes on products available.

Currency: thousands o fL a ts (LVL)

SPAIN 1998 Supply: Basic prices

Use: Purchasers’ prices

110 products e 72 industries Currency: millions o f Euro ITALY

1995 2000

Supply: Basic prices Use: Purchasers’ prices

59 industries / products Currency: millions o f Euro SWEDEN

1995 2001

Supply: Basic prices Use: Purchasers’ prices

57 industries / products

Currency: millions o f Swedish krona (SEK.) at previous year prices (t 1)

2.2. A p p l i c a t i o n o f P T P A c c o r d i n g to th e Es a 9 5 , th e s u p p l y a n d u se t a b l e s s h o u l d b e b a s e d o n th e local K A U ' ’ ( k i n d - o f - a c t i v i t y u n it) as u n it o f o b s e r v a t i o n , b u t in p r a c t i c e in m a n y c o u n t r i e s o n l y d a t a f ro m e n t e r p r i s e s a r e a v a i l a b l e w h i c h c a n n o t b e sp lit into m o r e h o m o g e n e o u s un its . T h i s la ck o f in f o r m a t i o n le a d s to a c o n s i d e r a b l e in c r e a s e o f t h e a m o u n t o f s e c o n d a r y p r o d u c t i o n in th e s u p p l y ta b le. In fact, th e o p tim al u n it for th e p r o d u c t i o n p r o c e s s a n a l y s i s is th e u n it o f h o m o g e n e o u s p r o d u c t io n , d e f i n e d as c o v e r i n g n o s e c o n d a r y a c tiv itie s , b u t u n f o r t u n a t e l y it is not o b s e r v a b l e . Г ^ 2.2.1. S w e d e n

&

f h e S ta tis tic a l O f f i c e o f S w e d e n p r o v i d e s t h e lo n g e s t t i m e s e r ie s o f s u p p l y an d u se ta b le s , s p a n n i n g s e v e n y e a r s ( 1 9 9 5 - 2 0 0 1 ) . T h e t a b le s a r e v a l u a t e d b o th at c u r r e n t p r ic e s a n d at p r e v i o u s y e a r ’s p r i c e s 7. T h e S w e d i s h t a b le s c o v e r a sli g h tly n a r r o w e r r a n g e o f it e m s th a n u s u a l l y o c curs: tr a d e , m a i n t e n a n c e a n d r e p a i r o f v e h i c le s , w h o l e s a l e t r a d e a n d retail tra d e are n o t a v a i l a b l e a s s e p a r a t e d ite m s b e c a u s e t h e N a t i o n a l S ta ti s tic a l O f f i c e o f S w e d e n c o n s i d e r s t h e s e p r o d u c t s a n d in d u s t r ie s a n a g g r e g a t e .

K.AU is defined as a part o f an institutional unit with as much as possible homogeneous production. In principle, as many local KAUs must be registered as there are secondary activities. Nevertheless a KAU can carry out one or more secondary activities if they cannot be separately identified from available accounting documents (§ 1.29, Eurostat 1996).

On the web site o f the Statistical Office o f Sweden only the series at current prices can be found. The tables at constant prices are available upon request.

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T h e p r o d u c t i o n m a tr ix is r e la tiv e ly d ia g o n a l - t h e r e a r e n o t v e r y m a n y s e c o n d a r y p r o d u c t s a n d , a s a ru le, th e y a r e sit u a te d in th e “ l o w ” z o n e o f th e ta b l e in h e r e n t to s e rv ic e s .

T a b l e 2 The industries where secondary production is most relevant in terms o f total output

(Sweden 2001)

27 M anufacturing o f m otor vehicles, trailers and semi-trailers 20.3% 49 Public administration and defence; compulsory social security 17.0%

23 M anufacturing o f office machinery and computers 16.6%

53 Activities o f membership organization n.e.c. 15.4%

17 M anufacturing o f chemicals and chemical products 15.2%

In t e r m s o f f re q u e n c y , in 2 0 0 1 , r e n ti n g s e r v ic e s o f m a c h i n e r y a n d e q u i p m e n t, c o m p u t e r a n d r e la te d s e r v ic e s , tr a d e , o t h e r b u s i n e s s s e r v i c e s a n d real e s ta te s e r v i c e s c o n s t i t u t e th e fiv e m o s t f r e q u e n t s e c o n d a r y p r o d u c t s . In fact a l m o s t all in d u s t r ie s p r o d u c e th e s e s e r v i c e s in a d d i t i o n to th e i r c h a r a c t e r i s t i c p r o d u c t. B ut i f o n e lo o k s at th e e x t e n t to w h i c h th e s e c o n d a r y p r o d u c t s p a r t i c i p a t e o v e r the total o u t p u t o f a c o m m o d i t y , th e s it u a ti o n a p p e a r s c o n s i d e r a b l y d i f f e r e n t ( T a b l e 3). T a b l e 3 The proportion o f each total commodity output made as secondary production

o f other industries (Sweden 2001)

45 Renting services o f machinery and equipm ent without opera

tor and o f personal and household goods 49.5%

47 _{Research and developm ent services} _37.6%

7 _{O ther mining and quarrying products} _31.9%

23 _{O ffice machinery and computers} _22.5%

34 Trade, maintenance and repair services o f m otor vehicles.

W holesale and Retail trade 19.7%

T h e e v i d e n c e f r o m T a b l e 3 in d ic a t e s tha t th e r e is an i n d u s t r y h a v i n g a q u ite lo w p r o d u c t i o n o f its m a i n p r o d u c t - th e r e n t i n g s e r v i c e s o f m a c h i n e r y a n d e q u i p m e n t a r e v e r y c l o s e to t h e c o n d i t i o n th a t m o r e th a n h a l f o f th e p r o d u c t i o n t a k e s p l a c e in th e p r i m a r y in d u s t ry for tha t p r o d u c t g r o u p . F o r e x a m p l e , in 2 0 0 1 , n e a r ly 5 0 p e r c e n t o f th e total r e n ti n g s e r v ic e s o f m a c h i n e r y is c a r ri e d o u t b y the

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p r i m a r y in d u s t ry , 1 6 % is s u p p l i e d b y t r a d e s e c to r, 5 , 4 % b y c o m p u t e r a n d re la te d s e r v ic e s a n d 5 % b y o t h e r b u s i n e s s s e rv ic es . T h e f o l l o w i n g o b s e r v a t i o n s a r e b a s e d p r i n c i p a l l y o n th e a n a l y s i s o f o n e o f th e P T P o u t p u t files c a l l e d

Problems.

L ik e t h e n e g a t i v e c o e f f i c i e n t s p r o d u c e d w h e n p e r f o r m i n g th e s t a n d a r d p r o d u c t t e c h n o l o g y a s s u m p t i o n th a t a r e u s e f u l to d e t e c t c o e x i s t i n g t e c h n o l o g i e s a n d / o r a g g r e g a t i o n p r o b l e m s , th e

P roblem s

file s h o w s th e m o s t r e l e v a n t i n c o n s i s t e n c i e s b e t w e e n th e o r i g i n a l d a t a a n d th e p r o d uct t e c h n o l o g y a s s u m p t i o n ( A l m o n , 2 0 0 3 ). T h e

Problem s

file in d i c a t e s 3 0 lines w ith th e b i g g e s t d i f f e r e n c e s ; h e r e a f t e r o n l y th e first fiv e lin e s a r e r e p o r te d . T h e first o f t h e n u m b e r s r e f e r s to th e c o l u m n s u m o f a b s o l u t e d i f f e r e n c e s ( C S A D ) b e t w e e n U s e a n d N e w U s e , a m a tr ix p e r f e c tly c o h e r e n t w ith th e j u s t c a lc u la t e d p r o d u c t - b y - p r o d u c t ta ble. T h e n th e e x a c t c o l l o c a t i o n in th e U s e m a t r i x w ith th e n u m b e r o f c o l u m n a n d th e title o f in d u s try is in d ic a t e d f o l l o w e d b y t h e row n u m b e r , th e b i g g e s t d i f f e r e n c e a n d th e ty p e o f p r o d u c t . T h e r u n o n th e v e r y first v e r s io n o f th e ta b le s r e v e a l e d f o l l o w i n g p r o b l e m s : Absolute values: CSAD C o l T i t l e = I n d u B t r y 3 5 9 0 . 9 35 R e t a i l & W h o l e s a l e T r a d e 1 8 9 3 . 4 28 M o t o r v e h i c l e s 1 6 7 1 . 9 49 O t h e r b u s i n e s s s e r v i c e s 1 5 5 6 . 6 23 M a c h i n e r y & e q u i p m e n t 1 0 4 4 . 7 48 R e s e a r c h & D e v e l o p m e n t C o e f f i c i e n t s : CSAD C o l T i t l e 0 . 033 48 R e s e a r c h & D e v e l o p m e n t 0 . 0 2 8 46 R e n t i n g s e r v i c e s of m a c h i 0 . 0 1 2 4 Coal, L i g n i t e , P e a t 0.011 35 R e t a i l & W h o l e s a l e T r a d e 0.011 53 S e w a g e & R e f u s e d i s p o s a l Max d i f f e r e n c e r o w ~ Product 23 1 1 8 4 . 9 M a c h i n e r y a n d e q u i p m e n t 45 1 0 6 2 . 9 R e a l e s t a t e s e r v i c e s 55 9 7 2 . 6 R e c r e a t i o n a l a c t i v i t i e s 23 6 8 0 . 7 M a c h i n e r y a n d e q u i p m e n t 45 6 0 3 . 7 R e a l e s t a t e s e r v i c e s Max d i f f e r e n c e 45 0 . 0 1 9 R e a l e s t a t e s e r v i c e s n e r y 23 0 . 0 1 6 M a c h i n e r y a n d e q u i p m e n t 8 0 . 0 0 2 N o n - m e t a l l i c m i n e r a l s 23 0 . 0 0 4 M a c h i n e r y a n d e q u i p m e n t

СОКЧ'{ Л-ОС

F o r a l m o s t all th e c o u n t r i e s c o n s i d e r e d in th is p a p e r , th e w h o l e s a l e a n d / o r retail t r a d e a r e t w o o f th e m o s t f r e q u e n t s e c o n d a r y p r o d u c t s . A c c o r d i n g to the 2001 s u p p l y m a t r i x , 4 4 s e c to r s p r o d u c e s o m e k in d o f tr a d e s e r v ic e s . A s a l r e a d y m e n t i o n e d , th e S w e d i s h s u p p l y a n d u s e ta b le s d o not d i s t i n g u i s h b e t w e e n tr a d e and r e p a ir o f m o t o r v e h i c le s , w h o l e s a l e a n d retail t r a d e b e c a u s e th e N a ti o n a l S tatistic al O f f i c e c a l c u l a t e s th e s e ite m s a s an a g g r e g a t e . S i n c e it is a l m o s t i m p o s s i b l e id e n t i f y h o m o g e n e o u s p r o d u c t s a n d p r o d u c t i o n p r o c e s s e s at th e in p u t- o u t p u t le vel o f a g g r e g a t i o n , in th e c a s e o f a f u r t h e r a g g r e g a t i o n o f it e m s it b e c o m e s i n d e e d to o a r d u o u s to d e f i n e a c h a r a c t e r i s t i c t e c h n o l o g y a b l e to d e s c r i b e th e p r o d u c t i o n p r o c e s s o f th is b a s k e t o f p r o d u c ts . T h e r e f o r e i t ’s not s u r p r i s i n g to find th e tr a d e s e c t o r at th e to p o f th e a b s o l u t e v a l u e s p a r t o f th e p r o b l e m s file a n d a m o n g th e fiv e m o s t r e l e v a n t d i f f e r e n c e s b e t w e e n c o e f fic ie n ts .

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M o r e o v e r , th is g r o u p o f i n d u s t r i e s h a s q u i t e a lot o f s e c o n d a r y p r o d u c t s , a m o n g w h i c h a p p e a r m a c h i n e r y a n d e q u i p m e n t n . e .c K. T h e p r o d u c t t e c h n o l o g y a s s u m p t i o n s e e m s to fail in th is c a s e a n d t h e i n d u s tr y t e c h n o l o g y w o u l d b e p r o b a b l y th e b e s t c h o i c e . T h e c o r r e c t i o n m a d e to o r i g i nal d a t a b y m o v i n g th e s e c o n d a r y p r o d u c t i o n to a p r o p e r i n d u s t r y a p p e a r s n a t u ral e n o u g h as t h e t e c h n o l o g y a n d th e in p u ts u s e d b y m a c h i n e a n d m a i n t e n a n c e s h o p s it u a te d at a p r o d u c e r o f w h o l e s a l e s e r v i c e s a r e p r o b a b l y m o r e s i m i l a r to t h a t o f th e s e c t o r d e a l i n g p r e v a l e n t l y w ith m e c h a n i c a l m a c h i n e r y . T h i s c o r r e c tio n h a s a c o n s i d e r a b l e p o s i t i v e im p a c t , b u t a n o t h e r p r o b l e m w i t h m o t o r v e h i c le s a p p e a r s . A p p l i c a t i o n o f in d u s t r y te c h n o l o g y a s s u m p t i o n to all th e s e c o n d a r y p r o d u c t s o f t r a d e s e c t o r c a n b e a s o lu t io n to t h e s e d i s c r e p a n c i e s . T h e in d u s t r y o f m o t o r v e h i c le s , th e s e c o n d la rg e s t d i f f e r e n c e e n c o u n t e r e d b e t w e e n U s e a n d N e w U s e , p r o d u c e s s o m e real e s ta t e s e r v i c e s , w h i c h c a n b e m o v e d to a p p r o p r i a t e s e c to r ; at th e s a m e t i m e the M o t o r v e h i c l e s i n d u s t r y u se s m a n y real e s ta t e s e r v i c e s ( f o r e x a m p l e th e s a le a n d le a s e o f n o n r e s id e n tia l b u i l d ings). T h e a l l o c a t i n g o f th e s e c o n d a r y m o t o r v e h i c le s p r o d u c t i o n f ro m o t h e r in d u s tr ie s to th e p r o p e r o n e a l l o w s to r e d u c e a lot th is d i s c r e p a n c y . F in a lly , it is n e c e s s a r y to m a k e s o m e c o n s i d e r a t i o n s a b o u t t h e t r e a t m e n t o f R e s e a r c h a n d D e v e l o p m e n t a c tiv i tie s in th e light o f Es a 95 rules. A c c o r d i n g to the Es a 95 r e q u i r e m e n t , R & D a c tiv i tie s s h o u l d b e p u t in a s e p a r a t e c o l u m n a n d th e y c a n b e r e c o r d e d as a s e c o n d a r y a c tiv ity o n ly w h e n n o t d i s t i n g u i s h a b l e f r o m t h e p r in c i p a l a c tiv i ty (§ 3 . 6 4 E u r o s ta t , 1996). P r o b a b ly th is is th e s e c t o r fo r w h a t is v e r y d if f i c u l t to e s t a b l i s h w h a t its c h a r a c t e r i s t i c t e c h n o l o g y is, r a t h e r it s e e m s m o r e p l a u s i b l e th a t in d u s t r ie s c a r r y i n g o u t s o m e R & D a c t i v i t i e s a d o p t t h e i r o w n t e c h n o l o g y r a t h e r t h a n tha t o f th e R & D , q u i t e b r o a d a n d g e n e r a l.

In S w e d e n , r o u g h l y t w o - t h i r d s o f re s e a r c h a n d d e v e l o p m e n t a c tiv i tie s are c a r r ie d o u t b y th e m a i n s e c t o r fo r tha t p r o d u c t g r o u p a n d it’s n o t a s u r p r i s e that m a n y o t h e r in d u s t r i e s c a r r y o u t s u c h a a c tiv ity : 1 8 % o f t h e to tal o u t p u t o f R & D is p r o d u c e d in M o t o r v e h i c l e s in d u s t r y a n d 10% in M a c h i n e r y a n d e q u i p m e n t s e c t o r ( th e s e a r e a l s o th e t w o i n d u s t r i e s w ith th e h i g h e s t i m p a c t o f R & D o n total o u t p u t , e q u a l to 3 - 4 p e r cent). In c o n c l u s i o n , d u r i n g the a p p l i c a t i o n o f A l m o n ’s a l g o r i t h m to th e 2001 S w e d i s h s u p p l y a n d u s e t a b l e s no s ig n i f i c a n t d i f f i c u lt ie s w e r e e n c o u n t e r e d . T h e r e w e r e few i n c o n s i s t e n c i e s b e t w e e n t h e p r o d u c t - t e c h n o l o g y a s s u m p t i o n a n d th e o rig in a l d a t a a n d , a f te r s o m e m a n u a l c o r r e c t i o n s to t h e o r i g i n a l ta b le s , a p e r f e c tly p l a u s i b l e s y m m e t r i c p r o d u c t - b y - p r o d u c t m a tr ix w i t h o u t n e g a t i v e s w a s o b ta in ed .

8 This item contains the production o f lifting and handling equipm ent, loading and unloading machinery as well as maintenance and repair services o f these machinery and equipment.

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2 .2 .2 . L a tv ia In th e i n t r o d u c t i o n t o th e 1997 L a t v i a n i n p u t - o u t p u t ta b le s , it is m e n t i o n e d th at r e g u l a r c a l c u l a t i o n s o f i n p u t - o u t p u t ta b le s s ta rt e d in L a t v i a o n l y r e c e n t l y a n d th is is th e s e c o n d p u b l i c a t i o n o f th is kin d . T h e s u p p l y a n d u s e t a b l e s fo r t h e y e a r 1995 w e r e j u s t a n e x p e r i m e n t a n d w e r e c o m p u t e d o n a v e r y a g g r e g a t e d le vel ( o n N A C E a n d C P A s e c t i o n s b r e a k d o w n , i.e. 17 ite m s). S o t h e t a b l e s f o r 1 9 9 6 a r e to b e c o n s i d e r e d th e v e r y first o n e s ( K u r c a lte , V d o v i n s , 2 0 0 0 ) . T h e le vel o f d e ta il f o r g o o d s a n d s e r v i c e s is 61 a n d 5 9 f o r i n d u s t r ie s . In g e n eral, p r o d u c t i o n a n d d i s t r i b u t i o n s e r v ic e s o f e l e c tr i c it y ( N o . 3 2 ) , m a n u f a c t u r e d g a s a n d d i s t r i b u t i o n s e r v i c e s g a s e o u s fu els ( N o . 3 3 ) , s t e a m a n d h o t w a t e r s e r v ic e s f o rm a s i n g l e p r o d u c t c a t e g o r y , b u t in th e L a t v ia n t a b l e s t h e y a p p e a r in a d i s a g g r e g a t e d form . T h i s d e t a i l e d i n f o r m a t i o n w ill b e lo st a s a t h e a l g o r i t h m r e q u i r e s th e s u p p l y ta b le to b e s q u a re : a c c o r d i n g to t h e o f fic ia l i n p u t - o u t p u t t a b le o f t h e C e n tr a l S ta tistic a l B u r e a u o f L a tv ia , th e s e t h r e e p r o d u c t s a r e m e r g e d a n d o n e p r o d u c t is m a d e o u t o f three. R e g a r d i n g th e s ta tis t ic a l un its , K u r c a l te a n d V d o v i n s ( 2 0 0 0 ) p o i n t o u t th a t b a s ic p a r t o f i n f o r m a t i o n is p r o v i d e d b y sta tistic a l s u r v e y s o n e n t e r p r i s e s a n d by th e a d m i n i s t r a t i v e r e g is t e r s w h i c h d o n o t c o n t a in in f o r m a t i o n o n local k in d o f a c tiv i ty u n its a s r e c o m m e n d e d b y the E S A 95.

T a b l e 4 The industries where secondary production is most relevant in terms

o f total output (Latvia 1997)

32 Collection, purification and distribution o f water 43.6%

54 Sewage and refuse disposal, sanitation 32.7%

50 O ther business activities 25.6%

46 Real estate activities 23.6%

1 Agriculture, hunting 22.0%

A s c a n b e s e e n fro m th e T a b l e 4, th e c o l le c tio n , p u r i f i c a t i o n a n d d i s t r i b u t i o n o f w a t e r a n d s e w a g e s e c t o r a r e th e t w o in d u s t r ie s w i t h th e h i g h e s t im p a c t o f s e c o n d a r y a c tiv i tie s o n t h e i r to tal o u tp u t. T h i s p o in t w ill b e d i s c u s s e d in d e ta il la ter on.

W h o l e s a l e t r a d e a n d R e ta il t r a d e s e c to r s h a v e th e h i g h e s t n u m b e r o f s e c o n d a r y p r o d u c t s , 3 0 a n d 25 r e s p e c ti v e ly .

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In 1997, real e s t a t e s e r v ic e s , retail a n d w h o l e s a l e tr a d e s e r v i c e s , h o te l an d r e s t a u r a n t s e r v i c e s a n d s u p p o r t i n g a n d a u x i lia r y t r a n s p o r t s e r v i c e s a r e t h e liv e m o s t f r e q u e n t s e c o n d a r y p r o d u c ts . In d i f f e r e n c e f ro m S w e d e n , w h e r e m o s t s e c o n d a r y p r o d u c t s c o n c e r n s e r v ic e s , in th e s u p p l y t a b l e o f L a tv ia , se v e ra l q u i t e c u r i o u s s e c o n d a r y p r o d u c t i o n s c a n b e f o u n d : i t ’s r e a lly u n u s u a l that m a n y i n d u s t r ie s a r e p r o d u c i n g p r o d u c t s o f a g r i c u l t u r e 4 o r e l e c tr i c it y , g a s a n d hot w a te r , e v e n i f in a n e g l i g i b l e a m o u n t . T h e ta b l e 5 p r e s e n t s th e t o p 5 list o f c o m m o d i t i e s a c c o r d i n g to th e p r o p o r tio n o f to tal o u t p u t p r o d u c e d a s s e c o n d a r y . T a b l e 5 The proportion o f each total commodity output made as secondary production

o f other industries (Latvia 1997)

47 Renting services o f machinery and equipment without operator

and o f personal and household goods 89.3%

32 _{Collected and purified water; distribution services o f water} _86.1%

26 _{Medical, precision and optical instruments, watches and clocks} _45.2%

2 _{Products o f forestry, logging and related services}

29.6% T h e p r i m a r y p r o d u c t s o f w a t e r p u r if i c a tio n a n d d i s t r i b u t i o n s e c t o r c o n s t i t u t e o n ly 1 4 % o f th e e c o n o m y - w i d e p r o d u c t i o n o f w a te r ; it s e e m s q u i t e u n u s u a l that n e a r ly 8 0 % o f w a t e r o u t p u t is c o m i n g f ro m s e w a g e in d u s t r y . A c c o r d i n g to the С Р Л c l a s s i f i c a t io n , th e d iv i s i o n No. 41 is m a d e u p o f d r i n k i n g a n d n o t - d r i n k i n g w a t e r a n d its d i s t r i b u t i o n s e r v ic e s ; th e c o l l e c t i o n a n d t r e a t m e n t s e r v i c e s o f s e w a g e m u s t b e in c l u d e d in to th e d iv is io n No. 90. In th e light o f t h e s e c o n s i d e r a tio n s , it s e e m s th a t th is a n o m a l y s t e m s f r o m a m i s c l a s s i f i c a t i o n o f t h e s e a c tiv i tie s w h i c h , in s p ite o f p r o f o u n d d i f f e r e n c e , c a n b e r e la te d at e n t e r p r i s e l e v e l 10. S e c o n d a r y p r o d u c t i o n p l a y s a l s o an i m p o r t a n t role in r e n t i n g s e r v i c e s o f m a c h i n e r y ,

' According to the original Latvian supply matrix, the following industries make products o f agriculture: fishing, manufacturing o f food and beverages, manufacturing o f textiles and o f wearing apparel, manufacturing o f wood and wood products, electricity, gas, steam and hot water, construction, w holesale and retail trade sector, transport services sector, real estate, public adm ini stration, education, health and social work, and at last, sewage and refuse disposal services (!).

" There are several analogies between the input structure o f these two products, too. It also deserves attention that almost 30 per cent o f inputs in the w ater industry are made up o f the collection and treatment o f sewage w hereas it presents only 8 per ccnt o f inputs in the sewage sector. As to the output structure o f these two industries, 56% o f the total output o f the water industry is w ater and the sewage constituted 43% o f its total output. The sewage sector, on the other hand, in addition to its characteristic product (67% o f its total), has an im portant secondary product - w ater distribution services that cover approximately 30% o f the total output o f this industry.

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w h e r e o n l y 1 1 % o f th e total p r o d u c t i o n is p r o d u c e d a s p r i m a r y p r o d u c t o f the c o r r e s p o n d i n g i n d u s t r y a n d 8 5 % a r e d u e to o t h e r b u s i n e s s s e r v i c e s se c to r. T h e a p p l i c a t i o n o f A l m o n ’s p r o d u c t - t o - p r o d u c t a l g o r i t h m to t h e o rig in a l L a t v ia n s u p p l y a n d u s e ta b le s h a s r e v e a l e d f o l l o w i n g p r o b l e m s : Absolute values: CSAD C o l T i t l e » I n d u s t r y 5 9 1 0 . 5 8 F o o d p r o d u c t s a n d b e v e r a g e s 5 3 3 2 . 3 1 A g r i c u l t u r e , H u n t i n g 4 4 8 5 . 0 33 C o n s t r u c t i o n 3704.3 41 S upporting, t r a n s p o r t s ervices 3 2 2 1 . 4 36 R e t a i l t r a d e s e r v i c e s Coefficients: CSAD o l T i t l e 0.114 32 Water, d i s t r i b u t i o n ser v i c e s 0.096 23 O f f i c e m a c h i n e r y & c o m p u t e r s 0 . 041 7 O t h e r m i n i n g a n d q u a r r y i n g 0 . 0 2 9 47 R e n t i n g of m a c h i n e r y

0.024 26 Medical & optical i n struments 0 . 0 2 0 10 T e x t i l e s 0 . 0 2 0 17 C h e m i c a l s Max d i f f e r e n c e r o w = Product 46 1746.2 Real e s t a t e s e r v i c e s 11 1115.8 W e a r i n g apparel; furs 41 3856.0 S upporting, t r a n s p o r t serv. 41 3630.2 Suppor t i n g , t r a n s p o r t serv. 46 1701.0 Real e s t a t e s e r v i c e s Max d i f f e r e n c e 54 0 .051 S e w a g e a n d R e f u s e d i s p o s a l 23 0.075 O f f i c e m a c h inery, c o m p u t e r s 17 0 . 0 2 5 C h e m i c a l s 57 0 .012 O t h e r s e r v i c e s 26 0 . 0 0 9 M e d i c a l & o p t i c a l i n s t r u m . 10 0 . 0 1 4 T e x t i l e s 10 0 . 014 T e x t i l e s

In c o m p a r i s o n w ith the S w e d e n ta b les , th e L a t v i a n o n e s n e e d a q u i t e la rg e n u m b e r o f c h a n g e s w ith

S ecT oP ri.dat

, th a t a l l o w s to a d o p t , fo r c e r t a i n p r o d u c t s , the i n d u s t r y - t e c h n o l o g y a s s u m p t i o n a n d m a k e s th e c o n v e r s i o n f r o m s e c o n d a r y t r a n s f e r to p r i m a r y s a le in th e M a k e m a trix . T h e s e c o n d a r y fo o d p r o d u c t i o n o f A g r i c u l t u r e is tr a n s f e r r e d to F o o d in d u s t r y a s th e c h a r a c t e r i s t i c t e c h n o l o g y o f l o o d in d u s t r y a p p e a r s m o r e a p p r o p r i a t e to d e s c r i b e its p r o d u c t i o n p r o c e s s . L i k e w ise , th e p r o d u c t s o f f o re s tr y m a d e in t h e a g r i c u l t u r e i n d u s t r y a r e c o l l o c a t e d to the a p p r o p r i a t e s e c to r. T h e e l e c tr i c it y p r o v i d e d b y m a n y i n d u s t r i e s is m o v e d into the p r i m a r y in d u s t r y f o r tha t p r o d u c t g ro u p . T h e p r o b l e m s r e g a r d i n g d i a g o n a l e l e m e n t s o f th e m a t r i x a r e e l i m i n a t e d by r u n n i n g th e p r o g r a m w ith th e o p t i o n

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A s a l r e a d y n o tic e d , in q u i t e a lot o f c a s e s th e p r o d u c t - t e c h n o l o g y a s s u m p t i o n w a s n o t sa tis f ie d b y th e o rig in a l d a t a an d t h u s th e i n d u s t r y - t e c h n o l o g y a s s u m p tion w a s e m p l o y e d . E v e n so, th e final resu lt a p p e a r s a b s o l u t e l y a c c e p t a b l e . It is p o s s i b l e th a t m o s t o f t h e p r o b l e m s m e t d u r i n g th e a p p l i c a t i o n o f A l m o n ’s a l g o rith m to th e L a t v ia n ta b le s a re c a u s e d , at least to s o m e e x t e n t, b y t h e q u a l i t y o f a v a ila b le d ata. It w ill b e u se fu l to in v e s tig a te a c c u r a t e l y th e r e li a b ili ty o f th e d a t a u se d fo r th e p r e p a r a t i o n o f S U T s , as w e ll to d i s t i n g u i s h g o o d s a n d s e r v i c e s p r o d u c e d b y K.AU a n d n o t b y in d u s t r ie s in o r d e r to g e t m o r e h o m o g e n e o u s ta bles.

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2.2.3. E s to n ia

T o g e t h e r w ith o t h e r B altic c o u n t r i e s , E s to n ia p a r t i c i p a t e d in t h e E u r o s t a t ’s p r o j e c t o n “ C o m p i l a t i o n o f S u p p l y a n d U s e T a b l e s a n d I n p u t - O u t p u t T a b l e s fo r t h e B a ltic S t a t e s ” . T h e s y m m e t r i c in p u t- o u t p u t t a b le a n d th e s u p p l y a n d u s e ta b le s, th e first o n e s m a d e in E s to n ia , w e r e c o m p i l e d in c o m p l i a n c e w i t h the E s a 95 r e c o m m e n d a t i o n s . A s in L atv ia, th e sta tistic a l u n its u s e d in th e c o m p i l a t i o n p r o c e s s w e r e e n t e r p r i s e s a n d n o t k in d o f a c tiv i tie s u n its a s E u r o s t a t s u g g e s t e d ( D e d e g k a j e v a 2 0 0 0 ) . T h e o r ig in a l S I O T d e r i v e d by t h e S ta ti s tic a l O f f i c e o f E s to n ia , d i s t i n g u i s h e d 112 p r o d u c t s in th e r o w s a n d 71 p r o d u c t s in th e c o l u m n s , but th e o p e r a t i o n a l v e r s i o n h a d o n ly 5 6 p r o d u c ts . C o m p a r e d to th e S w e d i s h a n d L a tv ia n s u p p l y ta b le s , in E s t o n i a m u c h m o r e in d u s t r ie s p r o d u c e , in a d d i t i o n to t h e i r c h a r a c t e r is ti c p r o d u c t , a q u i t e w i d e r a n g e of o t h e r c o m m o d i t i e s . F o r e x a m p l e , th e W h o l e s a l e t r a d e s e c t o r h a s j u s t 3 9 s e c o n d a r y p r o d u c ts , th e C o n s t r u c t i o n w o r k 29, O t h e r b u s i n e s s s e r v i c e s 28, etc. H o w e v e r , in t e r m s o f th e w e i g h t o f t h e s e c o n d a r y p r o d u c t i o n on th e to tal o u t p u t ol e a c h in d u s t r y , th e p i c t u r e r e s u lt s m a r k e d l y d if f e r e n t ( T a b l e 6). T a b l e 6 The industries where secondary production is most relevant in terms

o f total output (Estonia 1997)

15 Manufacturing o f coke and refined petroleum products _81.7%

29 Recycling _74.4%

19 _{M anufacturing o f basic metals} _65.0%

3 Fishing _50.1%

34 W holesale trade 38.1%

T h e p r i m a r y p r o d u c t s o f th e C o k e a n d re fin e d p e t r o l e u m p r o d u c t s in d u s try r e p r e s e n t o n l y 1 8 % o f its to tal o u t p u t , w h i l e 7 2 % o f t h e to tal o u t p u t is d u e to th e o t h e r m i n i n g p r o d u c t s . T h e r e c y c l i n g s e c t o r p r o d u c e s m u c h m o r e b a s i c m e ta l s ( 7 4 % o f its to tal o u t p u t ) th a n r e c o v e r e d s e c o n d a r y raw m a t e r i a l s ( 2 6 % o f total).

A s in L a tv ia , in E s t o n i a th e m o s t f r e q u e n t p r o d u c t s a r e th e real e s ta t e a c t i v i ties, s u p p l i e d b y 4 7 s e c t o r s o u t o f a total o f 5 6 , f o llo w e d b y land t r a n s p o r t s e r v ic es, w h o l e s a l e t r a d e s e r v i c e s a n d o t h e r b u s i n e s s a c tiv itie s. In a d d i t i o n to th e se q u i t e c o m m o n s e r v i c e a c tiv itie s , th e fifth m o s t f r e q u e n t s e c o n d a r y g o o d a r e m a c h i n e r y a n d e q u i p m e n t p r o v i d e d b y 28 ind u strie s.

T h e T a b l e 7 r e p o r t s th e list o f to p fiv e p r o d u c t s p r o d u c e d p r e v a l e n t l y a s s e c o n d a r y o u tp u t.

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T a b l e 7 The proportion o f each total commodity output made as secondary production

o f other industries (Estonia 1997)

5 Metal ores 100.0%

15 Coke, refined petroleum products 96.9%

19 Basic metals 96.7%

22 Office machinery and computers 80.9%

6 O ther mining products 77.0%

A s c a n b e s e e n f r o m th e T a b l e 7, the m e ta l o r e s a r e p r o d u c e d to ta lly as a s e c o n d a r y p r o d u c t . L a c k i n g t h e n a tu ra l r e s o u r c e s , t h e re is n o m e t a l o r e s m i n ing in d u s t r ie s in E s t o n i a a n d a q u i t e i r r e le v a n t a m o u n t o f m e ta l o r e s is to ta lly s u p p li e d b y c h e m i c a l s e cto r. C o k e a n d r e f in e d p e t r o l e u m p r o d u c t s a r e p r o d u c e d p r e v a i l i n g l y by o t h e r m i n i n g a c tiv itie s. W h o l e s a l e tr a d e , r e c y c l i n g a n d m a n u f a c tu r in g o f m e ta l p r o d u c t s a c c o u n t f o r a b o u t th r e e q u a r t e r s o f t h e e c o n o m y - w i d e p r o d u c ti o n o f b a s ic m e t a l s , w h i l e o n ly 3 , 3 % a r e s u p p l i e d b y th e c o r r e s p o n d i n g se ctor. T h e r o le o f th e p r i m a r y s e c t o r re s ts v e r y l im ite d b e c a u s e o f t h e s h o r t a g e o f ra w m a t e r i a l s a n d th e w e i g h t o f w h o l e s a l e tr a d e s e c t o r is d e t e r m i n e d j u s t by th e i m p o r t e r s o f m e ta ls . T h e a p p l i c a t i o n o f A l m o n ’s a l g o r i th m to th e o r ig in a l E s t o n i a n s u p p l y a n d use t a b le s h a s e v i d e n c e d th e f o l l o w i n g p r o b le m s : Absolute values: CSAD C o l T i t l e = I n d u s t r y 3 7 3.7 34 W h o l e s a l e t r a d e s e r v i c e s 232.7 7 F o o d p r o d u c t s and b e v e r a g e s 117.7 3 F i s h a n d f i s h i n g p r o d u c t s 93 . 1 12 W o o d a n d p r o d u c t s of w o o d 89.5 16 C h e micals, c hemical p r o d u c t s Max d i f f e r e n c e r o w = P r o d u c t 4 0 84.5 S u p p o r t i n g , t r a n s p o r t serv. 1 144.4 A g r i c u l t u r e 1 102.4 A g r i c u l t u r e 2 38.7 F o r e s t r y

4 31.0 Coal, peat, oil shale, nat. gas

Coefficients: CSAD C o l T i t l e 0.514 19 B a s i c m e t a l s 0.397 15 Coke, r e f i n e d p e t r o l e u m prod. 0.295 22 O f f i c e m a c h i n e r y & c o m p u t e r s 0 . 1 7 9 6 O t h e r raining p r o d u c t s 0 . 1 5 0 3 F i s h & f i s h i n g p r o d u c t s Max d i f f e r e n c e 19 0 . 0 6 0 B a s i c m e t a l s 6 0 .114 O t h e r m i n i n g p r o d u c t s 22 0.273 O f f i c e m a c hinery, c o m p u t e r s 21 0 . 0 7 7 M a c h i n e r y a n d e q u i p m e n t 1 0 . 1 3 0 A g r i c u l t u r e It’s w e l l - k n o w n th a t th e p r o d u c t - t e c h n o l o g y a s s u m p t i o n a p p l i e d to w h o l e sa le t r a d e s e r v ic e s , at t h e firs t lin e o f th e list, f r e q u e n t l y c o n t r a d i c t s t h e o r ig in a l data. In fact, it t u r n s o u t tha t w h o l e s a l e tr a d e is the in d u s t r y w i t h m o r e s e c o n d a r y p r o d u c t s th a n a n y o t h e r in d u s t r y a n d 33 in d u s t rie s p r o d u c e s o m e w h o l e s a l e tr a d e s e rv ic e s as s e c o n d a r y o u tp u t. T h e a d o p t i o n o f in d u s t r y t e c h n o l o g y a s s u m p t i o n has p e r m i t t e d to o v e r r i d e th is p r o b le m .

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F o l l o w i n g th e i n d ic a t io n s о

['Problems

File, th e food p r o d u c t s o f m a d e in a g r ic u l tu r e ( s a l a m i , s a u s a g e s , p r e s e r v e d m e a t etc) a n d in f i s h i n g ( p r e s e r v e d fish, v e ry d i f f u s e d in E s t o n i a ) a r e m o v e d to fo o d in d u s try , m o r e a d e q u a t e to d e s c r i b e th e p r o d u c t i o n p r o c e s s o f t h e s e g o o d s . O n th e b a s is o f th e o r i g i n a l S u p p l y ta ble, th e m i n i n g o f e n e r g y p r o d u c i n g m a t e r i a l s (in E s to n ia o n l y oil s h a le a n d p e a t are m i n e d ) i n d u s t r y is e n g a g e d in m a n u f a c t u r i n g s o m e m e c h a n i c a l m a c h i n e r y ( fo r m i n i n g a n d q u a r r y i n g ) but m o r e lik ely d e a l o n l y w ith m a i n t e n a n c e a n d r e p a ir s e r v ic e s o f th e m .

T h e E s to n ia n te x tile in d u s t r y p r o d u c e s a s i g n i fi c a n t a m o u n t o f w e a r i n g a p parel ( 5 , 7 % o f total o u tp u t) ; at th e s a m e t im e th e te x tile s a r e p r o d u c e d a s a s e c o n d a r y p r o d u c t b y w e a r i n g a p p a r e l s e c t o r ( 5 , 2 % o f its to tal o u tp u t) . A s p o in te d o u t b y D e d e g k a j e v a ( 2 0 0 2 ), th e s e i n d u s t r ie s w e r e c a r r y i n g o u t t w o d i f f e r e n t p r o d u c t io n p r o c e s s e s : t h e m a in in p u t s o f te x tile in d u s t ry a r e i m p o r t e d r a w c o t to n a n d c h e m i c a l p r o d u c t s b u t the w e a r i n g a p p a r e l s e c t o r d o n o t h a v e a n y i n p u t f r o m th e s e in d u s t r ie s . T h e S ta tistic a l O f f i c e o f E s to n ia h a s s o l v e d th is p r o b l e m o f n e g a t i v e s b y in t r o d u c i n g a n e w p r o d u c t in s u p p ly a n d u s e t a b l e s c a l l e d “ te x tile s p r o d u c e d b y w e a r i n g a p p a r e l ” . T h a n k s to th is i n f o r m a t i o n , th e t e x tile s m a d e in w e a r i n g a p p a r e l s e c t o r w e r e n o t m o v e d into te x tile s in d u s t ry , a q u i t e c o n v i n c i n g t r a n s f e r a t first sig ht. A s a l r e a d y n o t i c e d , 9 7 p e r c e n t o f r e f in e d p e t r o l e u m p r o d u c t s a r e p r o d u c e d o u t s i d e o f p r i m a r y s e c to r , p r e c is e l y in c h e m i c a l in d u s t ry . D e d e g k a j e v a ( 2 0 0 2 ) a s s e r te d tha t it w a s d u e to m i s c l a s s i f i c a t i o n o f a c tiv i tie s b u t s h e s t r e s s e d th a t " th e p ro d u c tio n p ro c e ss o f c h e m ic a l p ro d u c ts a n d o il sh a le is te c h n o lo g ic a lly lin ked th a t it is d iffic u lt to se p a ra te ”" . T h e r e c y c l i n g in d u s t r y h a s an i m p o r t a n t s e c o n d a r y p r o d u c t : in a d d i t i o n to its p r i m a r y p r o d u c t th a t r e g a r d s o n ly o n e - f o u r t h o f the total v a l u e o f p r o d u c t i o n , it p r o d u c e s a lot o f b a s ic m e ta l p r o d u c t s (74 p e r c e n t). T h e d e t a i l e d a n a l y s i s o f the b a s ic p r o d u c t i o n a n d i m p o r t s ta tis t ic s c a rrie d o u t by D e d e g k a j e v a ( 2 0 0 2 ) re v e a le d th a t a n e n t e r p r i s e c l a s s i f i e d a s a r e c y c l i n g in d u s t iy w a s e n g a g e d in c o n tract p r o c e s s i n g o f b a s ic m e ta l p r o d u c ts . In th is c a s e th e p r o d u c t - t e c h n o l o g y a s s u m p t i o n s e e m s n o t a p p r o p r i a t e a n d th e s e c o n d a r y a c tiv i ty is t r a n s f e r r e d to the b a s ic m e t a l s s e cto r. L ik e th e L a t v ia n ta b le s , th e E s to n ia n o n e s h ad to b e s i g n i f i c a n t l y m o d i f i e d in o r d e r to m a k e t h e m c o n s i s t e n t w ith p r o d u c t - t e c h n o l o g y a s s u m p t i o n . T h e s e c t o r s w i t h s e r i o u s p r o b l e m s a p p e a r , in part, the s a m e as in L a t v i a ( a g r i c u l t u r e , f o o d ) b u t s o m e o f t h e e n c o u n t e r e d d i f f i c u lt ie s are v e r y s p e c i f i c ( c h e m i c a l p r o d u c t s a n d p r o d u c t s o f m i n i n g a n d q u a r r y in g ) .

1! The industry o f refined petroleum products has its peculiar input structure: it uses principally products o f mining and quarrying industry, coke and petroleum products as well as chemical products. The three more im portant inputs in the chemical industry are instead chemical products, electricity and crude petroleum.

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2 .2 .4 . T u r k e y

T h e o r ig in a l s u p p l y a n d u s e ta b le s o f T u r k e y ( 1 9 9 6 ) a r e p u b l i s h e d at 97 p r o d u c t s a n d i n d u s t r i e s le vel. U n f o r t u n a t e l y , n o i n t r o d u c t i o n n o r d e s c r i p t i o n o f the o f fic ia l t a b le s in E n g l i s h w a s found.

In c o m p a r i s o n w ith o t h e r c o n s i d e r e d c o u n t r i e s , e x c e p t fo r Italy, T u r k e y is the c o u n t r y w ith less o f f - d i a g o n a l e l e m e n t s in th e p r o d u c t i o n ta b le ; b u t d i f f e r e n tly f r o m o t h e r c o u n t r i e s , w h e r e m o s t ly s o m e k in d o f s e r v i c e s a r e p r o d u c e d as a s e c o n d a r y p r o d u c t , n u m e r o u s T u r k i s h in d u s t r ie s h a v e a r e l e v a n t s e c o n d a r y p r o d u c t i o n o f m a c h i n e r y a n d e q u i p m e n t , c h e m i c a l s , r u b b e r a n d p la s tic p r o d u c ts . T h e i n d u s t r i e s w i t h th e h ig h e s t n u m b e r o f d if f e r e n t s e c o n d a r y a c t i v i t i e s a r e the m a n u f a c t u r i n g o f m e d i c a l , p r e c is io n a n d o p tic al in s t r u m e n t s , f u r n i t u r e a n d o t h e r m a n u f a c t u r i n g ( b o t h w ith 18 s e c o n d a r y p r o d u c ts ) , f o llo w e d b y m a n u f a c t u r i n g o f r u b b e r a n d p la s tic p r o d u c t s (1 7 ), m a c h i n e r y a n d e q u i p m e n t ( 1 7 ) a n d m a n u f a c t u r ing o f m o t o r v e h i c l e s (1 7 ). T a b l e 8 The industries w here secondary production is most relevant in terms

o f total output (Turkey 1996)

57 _{Recreational, cultural and sporting activities} _40.8%

16 _{Publishing, printing and reproduction o f recorded media} _33.0%

30 _{M anufacturing, o f furniture; other manufacturing n.e.c.} _32.5%

27 M anufacturing o f medical, precision and optical instruments,

w atches and clocks 24.3%

41 _{Air transport} _17.6%

A s s h o w n in t a b l e 8, th e s e c t o r th a t p r o v i d e s r e c r e a t i o n a l , c u l t u r a l a n d sp o r t- >ng a c tiv i tie s h a s a n i m p o r t a n t s e c o n d a r y p r o d u c t i o n m a d e u p m o s t l y o f o t h e r b u s i n e s s a c tiv i tie s . T h e s e c o n d a r y p r o d u c t i o n o f p u b l i s h i n g i n d u s t r y a c c o u n t s for o n e t h i r d o f th e to tal o u t p u t a n d c o n c e r n s m o s t l y o t h e r b u s i n e s s s e r v i c e s a n d Pulp, p a p e r a n d p a p e r p r o d u c t s . T h e m a n u f a c t u r i n g o f f u r n i t u r e a n d o t h e r m a n u f a c tu rin g i n d u s t ri e s p r o d u c e a w i d e r a n g e o f s e c o n d a r y p r o d u c t s : m o t o r v e h i c le s , r u b b e r a n d p l a s tic p r o d u c t s , te x tile s, b asic m e t a l s etc.

T h e fiv e m o s t fr e q u e n t s e c o n d a r y a c tiv i tie s a r e r e s e a r c h a n d d e v e l o p m e n t ' \ retail tr a d e , real e s ta t e a c tiv i tie s , o t h e r b u s i n e s s a c t i v i t i e s a n d s u p p o r t i n g a n d a u x i lia r y t r a n s p o r t a c tiv itie s. T h e ta b le 9 i n d ic a t e s th e f iv e p r o d u c t s w ith the h ig h e s t i m p a c t o f s e c o n d a r y p r o d u c t i o n o n the to tal s u p p l y o f a c o m m o d i t y .

It is recalled that in Estonia the R&D are produced only as a primary product. In Latvia these activities are carried out mainly by the R&D sector (95%) and the education accounting for the rem aining 5%.

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T а Ы e 9 The proportion oľeach total commodity output made as secondary production

o f other industries (Turkey 1996)

48 Renting services o f machinery and equipment without operator

and o f personal and household goods 78.4%

50 _{Research anti developm ent services} _77.2%

42 _{Supporting and auxiliary transport services; travel agency services} _63.4%

47 _{Real estate services} _59.5%

T h r e e q u a r t e r s o f r e n ti n g s e r v i c e s o f m a c h i n e r y a n d e q u i p m e n t a r e p r o v i d e d by C o n s t r u c t i o n w o r k in d u s t r y a n d j u s t 2 2 % a r e p r o d u c e d a s p r i m a r y p r o d u c t o f th e c o r r e s p o n d i n g in d u s t ry . O n l y 23 p e r c e n t o f th e to ta l r e s e a r c h a n d d e v e l o p m e n t s e r v i c e s a r e p r i m a r y p r o d u c t s ; th e r e is n o in d u s t r y p r o d u c i n g a s i z a b l e a m o u n t o f this k i n d o f s e r v ic e s , b u t a g r e a t n u m b e r o f s e c t o r s a r e m o r e o r less e n g a g e d in r e s e a r c h a c tivitie s. R u n n i n g th e A i m o n ’s a l g o r i t h m j u s t o n c e o n th e o rig in a l d a t a h a s e v i d e n c e d th e f o l l o w i n g d e v i a t i o n s b e t w e e n th e o r ig in a l U s e ta b le a n d th e c o m p u t e d N e w U s e ta ble. O n t h e b a s is o f t h e s e i n d ic a t io n s , the a n a l y s i s o f th e la rg e s t d if fe r e n c e s h a s b e e n c a r ri e d o u t a n d s o m e c o r r e c t i o n s to the o r ig in a l d a t a m a d e . T h e n th e a l g o r i t h m h a s b e e n r e r u n a n d o t h e r c o r r e c t i o n s a n d h a s b e e n m a d e , o n l y o n e o r a fe w at a tim e. Absolute values: CSAD C o l T i t l e = I n d u s t r y Max d i f f e r e n c e r o w - P r o d u c t 68803.4 42 Supporting & Transport services 38 5 8 4 6 9 . 8 H o t e l s & R e s t a u r a n t s 5 5 7 1 6 . 0 39 L a n d t r a n s p o r t 38 4 8 5 9 5 . 2 H o t e l s & R e s t a u r a n t s 3 0 1 0 9 . 3 11 T e x t i l e s 11 1 8 6 1 3 . 2 T e x t i l e s 2 1 8 1 4 . 7 51 O t h e r b u s i n e s s s e r v i c e s 20 5191.9 O t h e r n o n -metal, m i n e r a l s 2 0 9 9 5 . 2 1 A g r i c u l t u r e 11 1 7 7 1 7 . 5 T e x t i l e s Coefficients: CSAD C o l T i t l e Max d i f f e r e n c e

0.332 42 S u p porting & T r a n s p o r t services 38 0 . 2 8 2 H o t e l s & r e s t a u r a n t s 0.064 30 Furniture; O t h e r m a n u f a c t u r i n g 18 0 .013 C h e m i c a l s 0 . 0 6 0 57 R e c r e a t i o n a l a c t i v i t i e s 18 0 . 0 1 0 C h e m i c a l s 0 . 0 4 8 48 R e n t i n g of m a c h i n e r y 9 0 . 0 2 8 Food, b e v e r a g e s 0.048 27 M e d i c a l & O p t i c a l i n s t r u m e n t s 27 0.016 Me d i c a l , O p t i c a l instruments A s a l r e a d y n o tic e d , m a n y i n d u s t r ie s p r o d u c e s e r v ic e s n e c e s s a r y to th e ir p r o d u c t io n . In fact, a s p o i n t e d o u t in t h e Es a 95 ( § 3 .1 2 a n d 3 . 1 3 ) , th e a n c i l l a r y o r s u p p o r t i n g a c tiv itie s , i.e. th o s e th a t a re n o t in t e n d e d fo r u s e o u t s i d e t h e e n t e r p r i s e as sa les, m a r k e t i n g , d a t a p r o c e s s i n g , t r a n s p o r ta tio n , s t o r a g e e tc., s h o u ld b e tr e a te d as in te g ra l p a r t s o f t h e p rin c i p a l o r s e c o n d a r y a c t i v i t y w i t h w h i c h th e y

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are a s s o c i a t e d a n d c o n s e q u e n t l y t h e o u t p u t o f a n a n c i l l a r y a c t i v i t y s h o u l d n o t b e e x p lic i tly r e c o g n i z e d n o r r e c o r d e d s e p a r a te ly .

S u p p o r t i n g a n d a u x i l i a r y t r a n s p o r t s e r v ic e s r e p r e s e n t o n e o f t h e m o s t d i f f used s e c o n d a r y a c tiv itie s . T h i s c a t e g o i y o f s e r v ic e s d o n o t s a t i s f y th e c o n d i t i o n that at least a h a l f o f t h e p r o d u c t i o n ta k e s p l a c e in th e p r i m a r y i n d u s t r y for th at p r o d u c t g r o u p ( s e e T a b l e 9 ) ' \ T h e m ix o f ty p ic a l in p u ts fo r th e m a i n p r o d u c t o f the p r o d u c i n g in d u s t r i e s r e s u lt s c o n s i d e r a b l y d if fe r e n t f r o m th e i n p u t s tr u c t u r e for th is p r o d u c t g r o u p . T h e p r o b l e m h a s b e e n s o lv e d b y m o v i n g t h e s e s e c o n d a r y a c tiv itie s to th e m a i n s e c t o r p r o d u c i n g th e s e se rv ic e s .

T h e Na c e d i v i s i o n c a lle d “ M a n u f a c t u r i n g o f f u rn it u re a n d o t h e r m a n u f a c tured g o o d s ” is p a r t i c u l a r l y h e t e r o g e n e o u s : a c tiv i tie s p r o d u c i n g fu rn it u re , j e w e l lery a n d r e la te d a rtic le s , m u s i c a l in s t r u m e n t s , s p o r t s g o o d s , g a m e s a n d to y s, b a b y c a r r i a g e s a n d s o m e o t h e r m i s c e l l a n e o u s g o o d s b e l o n g to th is g r o u p . T h i s b r o a d set o f in d u s t rie s , lik e c h e m i c a l o n e , p r o d u c e s n u m e r o u s g o o d s m a i n to o t h e r in d u s t rie s , a m o n g w h i c h te x tile s. A c c o r d i n g to th e p u b l i s h e d d a ta , te x tile p r o d u c t s a r e o n e o f th e m o s t i m p o r t a n t s e c o n d a r y p r o d u c t s o f c h e m i c a l s in d u s try, as w ell a s o f o t h e r m a n u f a c t u r i n g s e c to r , b u t t h e y a r e p r o d u c e d w i t h little te x tile i n p u ts , w h i c h c o n s t i t u t e th e m a i n in p u t o f t e x tile s in d u s t r y . B e c a u s e t h e p r o d u c t t e c h n o l o g y a s s u m p t i o n is n o t a p p l i c a b l e in c a s e o f e x i s t e n c e o f m o r e th a n o n e w a y to p r o d u c e a p r o d u c t, the d if f e r e n c e b e t w e e n U s e a n d N e w U s e m a trices w a s e l im in a te d by tr a n s f e rr in g this s e c o n d a r y p r o d u c t to th e te x tile s sector.

A p r o p e r a p p l i c a t i o n o f A l m o n ’s m e t h o d r e q u i r e s th a t at le ast a h a l f o f th e p r o d u c t i o n t a k e s p l a c e in th e p r i m a r y in d u s t r y for a g i v e n p r o d u c t g r o u p . A s s h o w n in T a b l e 9, t h i s r e q u i r e m e n t is n o t sa tis f ie d in th e c a s e o f r e n t i n g o f m a c h i n e r y a n d e q u i p m e n t , r e s e a r c h a n d d e v e l o p m e n t , s u p p o r t i n g a n d t r a n s p o r t s e r v ic es, n o r fo r th e real e s ta t e ac tiv itie s.

In c o m p a r i s o n w i t h o t h e r c o u n t r i e s , th e T u r k i s h t a b l e s n e e d e d n u m e r o u s m a n u a l c o r r e c t i o n s a n d r e i t e r a t i o n s o f th e a l g o r i t h m b e f o r e a q u i t e s a t i s f a c t o r y s y m m e t r i c t a b le w a s o b t a i n e d . T h e a d o p t i o n o f A l m o n ’s a l g o r i t h m r e q u i r e d s e v eral r e i t e r a t i o n s a n d c o r r e c t i o n s to th e o r ig in a l d a ta , d u e , a l m o s t in p a rt, to the p r e s e n c e o f f o u r p r o d u c t g r o u p s n o t s a tis f y in g th e c o n d i t i o n th a t h a l f o f t h e p r o d u c t io n o f e a c h p r o d u c t is in its p r i m a r y in d u s t r y , a s w e l l a s to h e t e r o g e n e i t y in t h e c l a s s i f i c a t i o n s y s t e m .

11 The categoiy is made up by cargo handling and storage services. In fact, many industries may have their own warehouses.