The Role of Individual Firms in Aggregate Fluctuations: Evidence from Hungary

Norbert Czinkán ()
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Norbert Czinkán: Candidate at the University of Alicante

Financial and Economic Review, 2017, vol. 16, issue 2, 40–63

Abstract: This paper investigates the role of activities by Hungarian firms in generating aggregate fluctuations for the time period 2000–2013. The paper decomposes aggregated sales volatility into a macro-sectoral and firm-specific component and finds that shocks to individual firms contribute significantly to aggregate fluctuations. The relative contribution of idiosyncratic shocks to sales volatility at the aggregate level is 55.5 per cent for the whole economy and 56.4 per cent for the manufacturing sector. The main mechanism through which firm fluctuations manifest themselves in aggregate fluctuations is input–output linkages.

Keywords: Aggregate fluctuations; Firm-level shocks; Macro-sectoral shocks (search for similar items in EconPapers)
JEL-codes: E32 F12 F14 F41 (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:mnb:finrev:v:16:y:2017:i:2:p:40-63

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