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On the heterogeneity of sectoral growth and structural dynamics: evidence from Austrian manufacturing industries

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  • Werner Holzl
  • Andreas Reinstaller

Abstract

This article studies the factors driving structural dynamics across Austrian manufacturing industries. Using a Structural Vector Autoregressive Model (SVAR) framework we identify sectoral labour productivity and demand shocks that are orthogonal to aggregate shocks. We analyse the sectoral impulse-response patterns and find that the effect of industry labour productivity shocks on industry output growth is quite heterogeneous. We devise a taxonomy that allows us to classify industries according to the effect productivity and demand shocks have on output growth. We also show that productivity shocks are quite heterogeneous not just across industries but also over time, whereas shocks to sectoral demand growth are more systematic. We test the taxonomy in a panel regression and are able to confirm our sector-specific findings. Industry demand shocks and aggregate productivity and demand shocks lead always to an increase in industry output and industry employment.

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  • Werner Holzl & Andreas Reinstaller, 2011. "On the heterogeneity of sectoral growth and structural dynamics: evidence from Austrian manufacturing industries," Applied Economics, Taylor & Francis Journals, vol. 43(20), pages 2565-2582.
    • Handle: RePEc:taf:applec:v:43:y:2011:i:20:p:2565-2582
    DOI: 10.1080/00036840903299748
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    Citations

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    Cited by:

    1. Karl Aiginger & Susanne Bärenthaler-Sieber & Johanna Vogel, 2013. "Competitiveness under New Perspectives. WWWforEurope Working Paper No. 44," WIFO Studies, WIFO, number 47019, April.
    2. Karl Aiginger, 2016. "Deficits and Strengths in Austrian Competitiveness," FIW Policy Brief series 029, FIW.
    3. Karl Aiginger & Susanne Bärenthaler-Sieber & Johanna Vogel, 2015. "Competitiveness of EU versus USA. WWWforEurope Policy Paper No. 29," WIFO Studies, WIFO, number 58553, April.
    4. Jürgen Janger & Werner Hölzl & Serguei Kaniovski & Johannes Kutsam & Michael Peneder & Andreas Reinstaller & Susanne Sieber & Isabel Stadler & Fabian Unterlass, 2011. "Structural Change and the Competitiveness of EU Member States," WIFO Studies, WIFO, number 42956, April.
    5. Fabian Unterlass, 2013. "The relationship between innovation, exports and economic performance. Empirical evidence for 21 EU countries," EcoMod2013 5655, EcoMod.

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