Heterogeneity in Manufacturing Growth Risk

Daan Opschoor, Dick van Dijk and Philip Hans Franses
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Daan Opschoor: Erasmus University Rotterdam

No 21-036/III, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: We analyze output growth risk with respect to financial conditions across U.S. manufacturing industries. Using a multi-level quantile regression approach, we find strong heterogeneity in growth risk, particularly between the more vulnerable durable goods sector and the more resilient nondurable goods sector. Moreover, we show that industry characteristics significantly explain these differences. Large, or material intensive durable goods producing, or energy intensive nondurable goods producing industries are more vulnerable to adverse financial conditions, while industries engaging in labor hoarding, or with a high capital or overhead labor intensity are less susceptible.

Keywords: downside risk; business cycle; quantile regression; manufacturing; financial conditions (search for similar items in EconPapers)
JEL-codes: C21 E32 E44 L16 L60 (search for similar items in EconPapers)
Date: 2021-05-04
New Economics Papers: this item is included in nep-fdg and nep-mac
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