Backward and forward linkages of the construction sector: An input-output analysis and the bon curve in the case of North Cyprus

Abstract

Relevant literature, especially the Bon curve, is used to document the dynamo role of the construction sector in North Cyprus on the basis of an empirical estimation of backward and forward linkages during the period 1998 and 2005. This was a period when the North Cyprus economy experienced an economic boom in the aftermath of the UN Peace Plan known as the Annan Plan for settling the Cyprus problem. The latest input-output table for the North Cyprus economy is 1998 and the authors had to derive backward and forward linkages for 2005 from a detailed breakdown of inter-industry transactions per unit of construction output using the most significant purchases and deliveries, normalizing these transactions for comparability between 2005 and 1998. The results reflect radically different patterns of inter-industry transactions in 2005 compared to 1998. The paper also has general interest in highlighting the possibility of a modified Bon curve for micro-states, such as North Cyprus, in which environmental constraints may be encountered earlier implying an inverted V-shaped Bon curve in place of a inverted U-shaped.