The Leading Sectors in the Jordanian Economy: The 2016 Input-Output Model

The current study aims to analyze the interconnection level among economic sectors in Jordan, to identify the leading sectors that have the ability to deepen the degree of forward and backward economic interconnection, and to adopt them as beacons of growth with priority in the development plans. The study suggests a new scale based on the Rasmussen scale of forward linkage, the “Dispersion Sensitivity Index”. The scales presented by Rasmussen are based on reversing Leontief matrix, which depends on demand. The study translates Rasmussen's forward linkage measure to width-driven models using the reversed Gausch matrix. This study arrived at the conclusion that (8) main sectors in Jordan show somewhat high indicators of strength and sensitivity of dispersion, but they show a low coefficient of variation. These sectors are: “Mining and quarrying”, “Animal Production”, “Manufacture of Other Food Products”, “Manufacture of Wood, Paper and Printing”, “Manufacture of Pharmaceutical Products”, “Manufacture of Other Non-Metallic Mineral Products”, “Water Supply, and Sanitation Systems”, “Waste Management and Treatment Activities”, “Administrative Activities and Support Services”. Consequently, investment must be directed to these sectors, for they show the highest interconnection with several sectors in Jordan, i.e. increasing final demand in these sectors would encourage increasing production in most other sectors, and if production factors increase in those sectors, the level of production would grow in the same way in most other sectors.