Importance of Energy for Industries and Role of the Energy Sector in Turkey’s Economy

Abstract

It is aimed to examine importance, impact, structure and relationship of the energy industry with other industries by using input-output analysis for Turkey. In this context, input-output model is used to analyses 2002 and 2012 data. Input coefficients matrix, Leontief matrix and Leontief inverse matrix were obtained via the Input-Output tables of 2002 and 2012. Key sectors in the economy, forward and backward linkage effects and income, output and employment multipliers of all industries were analyzed with the input – output model. According to the results of the analysis, the energy industry was found to be the key sector in both years. This shows that the energy industry has an important place in Turkish economy. Although the output multiplier value in the energy sector is high, employment and income multiplier values are found to be low. The low value of the income multiplier in the energy industry shows that Turkey is dependent on foreign energy. In addition, the high production multiplier value in the energy industry means that the degree of structural correlation is high.