ABSTRACT
In the 1860s Germany produced annually approximately one million tons of iron, in the form of pig-iron, bar-iron, cast-iron, wire and steel. By 1870 pig-iron and steel production had risen to 1.4 million tons and 170,000 tons respectively and output at this stage was already greater than that of France or Belgium. This chapter reassess the role of the pig-iron industry on the basis of an econometric analysis of this sector's backward linkages. The statistical method of measuring the backward linkage effects is very similar to the standard input-output-calculation. The mining sector of the German economy in particular was affected to some extent by the growth of the pig-iron industry, as dependency rates, ranging between ten and ninety per cent for three selected sub-branches of this industry show. The relative retardation in the improvement of productivity within the entire mining sector accounted for a measurably larger multiplier effect in relation to employment than sectoral value added.
