Economic Ripple Effects of Health-Functional Food Industry Applying Input-Output Analysis

Abstract

This study measures the ripple effect of the fast-growing health-functional food industry on the national economy, based on input-output analysis. An endogenous household consumption model is adopted to measure the economic ripple effect, which can measure both direct and indirect effects and inducement effects. The results show that the health-functional food industry mostly procures intermediate goods produced domestically, and also has excellent job creation effects. Also, the health-functional food industry growth contributes to higher economic ripple effects on national industrial development due to high backward linkage effects. However, many small-scale enterprises in the industry show structural weakness.