The Identification of Economic Base Industries, with an Application to the Newfoundland Fishing Industry

Noel Roy, Ragnar Arnason and William E. Schrank


The contribution of an industry to GDP is typically measured by its value added. However, casual observation suggests that some industries play a greater role in overall economic activity than this measure indicates. Observations of this kind have in particular been applied to resource industries and have given rise to the concept of the economic base. Unfortunately, empirical and econometric verification of the concept of a base industry has been limited. This paper outlines a theory of base industries, develops a methodology for identifying economic base industries and measuring their impact, and applies this methodology to the fishing industry of Newfoundland. (JEL C32, Q22)

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