Economic impact analysis of steel industry in Republic of Macedonia: The case of Makstil a.d Skopje

Abstract

The main aim of the paper is empirical quantification of total economic impact of steel industry on Macedonian economy through the case of Maksil a.d - Skopje. The empirical quantification involves exploring the direct effects (the contribution of the Makstil to GDP, export, employment, taxes and corporate - social responsibility) and more important estimating the multiplicative effects (indirect effects through the chain of suppliers and induced effects by the stimulation of final household's consumption) that the Maktil a.d - Skopje as a largest company within the steel industry generates in the national economy by the reproduction processes. The economic impact methodology based on input - output model is applied to estimate the multiplicative effects. Furthermore, the empirical analysis of economic and financial indicators is done to capture the economic performance of Makstil a.d - Skopje. The type I output multiplier is 1.75. This indicates that for every denar increase in sales of Makstil a.d - Skopje, total output of the Macedonian economy increases by 1.75 denars, 1 denars is direct sales increase, another 0.75 denars arise from indirect or supply chain impacts. On the other side, the type II output multiplier is 2.1. This indicate that for every denars increase in production of Makstil a.d - Skopje, the total economic impacts is 2.1 denars (1.75 denars from direct and indirect or supply chain effects) and 0.35 denars contributed by induce or consumption effects. The estimated results indicate that the multiplicative effects (indirect and induced) of Makstil a.d - Skopje in terms of total value added is higher. [ABSTRACT FROM AUTHOR]