Do Business-related Services Really Lag Behind Manufacturing Industries in the Business Cycle? Empirical Evidence on the Lead/Lag Relationship Between Business-related Services and Manufacturing Industries for Germany

Ulrich Kaiser () and Katrin Voß

No 99-34, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: In an a priori view, it is usually assumed that the business cycle of manufacturing industries leads the business cycle of the service sector. This seems to be even more plausible for the relationship between business-related services, whose high growth rates in recent years were largely due to increased outsourcing activities of the manufacturing sector. In this paper it is shown that the relationship is not as simple as it appears at first sight. We run Granger causality tests between sales growth rates of the business-related service sector against growth rates of various series of the manufacturing sector. It turns out that the relationship between business-related services and manufacturing is either contemporaneous or bi-directional, while no evidence is given for manufacturing leading business-related services.

Keywords: business cycle; Granger causality; business-related services (search for similar items in EconPapers)
JEL-codes: C22 E32 (search for similar items in EconPapers)
Date: 1999
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:5276

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