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The contribution of firm-level shocks to aggregate fluctuations: The case of Sweden

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  • Friberg, Richard
  • Sanctuary, Mark

Abstract

We use annual observations on sales at the firm-destination level of all Swedish firms for 1997–2008 to examine the contribution of firm-level shocks to aggregate fluctuations. The firm-specific and sector-destination components each contribute about equally to aggregate sales volatility. For export volatility, the firm-specific component is more important. The analysis is conducted so as to ease a comparison to earlier results using French data. Compared to the French case the Swedish data show greater granularity and greater overall volatility, but also a lower firm-level contribution to aggregate volatility.

Suggested Citation

  • Friberg, Richard & Sanctuary, Mark, 2016. "The contribution of firm-level shocks to aggregate fluctuations: The case of Sweden," Economics Letters, Elsevier, vol. 147(C), pages 8-11.
    • Handle: RePEc:eee:ecolet:v:147:y:2016:i:c:p:8-11
    DOI: 10.1016/j.econlet.2016.08.009
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    References listed on IDEAS

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    1. Andrew T. Foerster & Pierre-Daniel G. Sarte & Mark W. Watson, 2011. "Sectoral versus Aggregate Shocks: A Structural Factor Analysis of Industrial Production," Journal of Political Economy, University of Chicago Press, vol. 119(1), pages 1-38.
    2. Julian di Giovanni & Andrei A. Levchenko & Isabelle Mejean, 2014. "Firms, Destinations, and Aggregate Fluctuations," Econometrica, Econometric Society, vol. 82(4), pages 1303-1340, July.
    3. Daron Acemoglu & Vasco M. Carvalho & Asuman Ozdaglar & Alireza Tahbaz‐Salehi, 2012. "The Network Origins of Aggregate Fluctuations," Econometrica, Econometric Society, vol. 80(5), pages 1977-2016, September.
    4. Julian di Giovanni & Andrei A. Levchenko, 2012. "Country Size, International Trade, and Aggregate Fluctuations in Granular Economies," Journal of Political Economy, University of Chicago Press, vol. 120(6), pages 1083-1132.
    5. Xavier Gabaix, 2011. "The Granular Origins of Aggregate Fluctuations," Econometrica, Econometric Society, vol. 79(3), pages 733-772, May.
    6. Stella, Andrea, 2015. "Firm dynamics and the origins of aggregate fluctuations," Journal of Economic Dynamics and Control, Elsevier, vol. 55(C), pages 71-88.
    7. Ekholm, Karolina & Moxnes, Andreas & Ulltveit-Moe, Karen Helene, 2012. "Manufacturing restructuring and the role of real exchange rate shocks," Journal of International Economics, Elsevier, vol. 86(1), pages 101-117.
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    Citations

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    Cited by:

    1. Julian di Giovanni & Andrei A. Levchenko & Isabelle Mejean, 2018. "The Micro Origins of International Business-Cycle Comovement," American Economic Review, American Economic Association, vol. 108(1), pages 82-108, January.
    2. Jozef Konings & Galiya Sagyndykova & Venkat Subramanian & Astrid Volckaert, 2021. "The granular economy of Kazakhstan," Working Papers 2021/01, Nazarbayev University, Graduate School of Business.
    3. Sandro Claudio Lera & Didier Sornette, 2017. "GDP growth rates as confined L\'evy flights," Papers 1709.05594, arXiv.org.
    4. Dacic, Nikola & Melolinna, Marko, 2019. "The empirics of granular origins: some challenges and solutions with an application to the UK," Bank of England working papers 842, Bank of England.
    5. Norbert Czinkán, 2017. "The Role of Individual Firms in Aggregate Fluctuations: Evidence from Hungary," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 16(2), pages 40-63.
    6. Carlos Melo Gouveia & Cristina Manteu & Sónia Cabral, 2020. "The granularity of Portuguese firm-level exports," Economic Bulletin and Financial Stability Report Articles and Banco de Portugal Economic Studies, Banco de Portugal, Economics and Research Department.
    7. Nikola Dacic & Marko Melolinna, 2022. "The empirics of granular origins: some challenges and solutions with an application to the UK," Journal of Productivity Analysis, Springer, vol. 58(2), pages 151-170, December.
    8. Svetlana Popova, 2019. "Idiosyncratic shocks: estimation and the impact on aggregate fluctuations," Bank of Russia Working Paper Series wps46, Bank of Russia.
    9. Jozef Konings & Galiya Sagyndykova & Venkat Subramanian & Astrid Volckaert, 2023. "The granular nature of emerging market economies: The case of Kazakhstan," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 31(2), pages 429-464, April.
    10. Stelios Giannoulakis & Plutarchos Sakellaris, 2023. "Financial crises, firm‐level shocks and large downturns: Evidence from Greece," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(2), pages 1549-1562, April.

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    More about this item

    Keywords

    Firm heterogeneity; Aggregate fluctuations; Granularity;
    All these keywords.

    JEL classification:

    • D20 - Microeconomics - - Production and Organizations - - - General
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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