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Did the Global Financial Crisis Impact European Industrial Concentration?

Danninger, Philipp LU (2016) NEKP01 20161
Department of Economics
Abstract
The global financial crisis of 2007 shook up the European economic landscape through many channels. However, deeper economic integration and the resulting industrial specialization patterns, can partly explain the different impacts across countries. Economic downturns are less likely to congest across borders if the industrial composition is less homogeneous. This essay analyzes the effects of the financial crisis on European manufacturing concentration. The chosen channel of capital formation however shows insignificant results when investigating a respective time frame, including the crisis years. Also the analysis of differences in the dependence for external finance across industries does not add remarkable explanatory power.... (More)
The global financial crisis of 2007 shook up the European economic landscape through many channels. However, deeper economic integration and the resulting industrial specialization patterns, can partly explain the different impacts across countries. Economic downturns are less likely to congest across borders if the industrial composition is less homogeneous. This essay analyzes the effects of the financial crisis on European manufacturing concentration. The chosen channel of capital formation however shows insignificant results when investigating a respective time frame, including the crisis years. Also the analysis of differences in the dependence for external finance across industries does not add remarkable explanatory power. Nevertheless, further pursued robustness checks indicate high importance of both of these factors when looking at the pre-crisis years in which a significant credit boom occurred. The results of these tests show a positive correlation between the concentration index in the comparison of individual industries over the analyzed country group and capital formation. It seems that in the period before the crisis, the location of capital-intensive industries is significantly affected by capital formation. The crisis might have temporarily broken this link and the importance of capital formation, in order for countries or industries to specialize. (Less)
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author
Danninger, Philipp LU
supervisor
organization
course
NEKP01 20161
year
type
H2 - Master's Degree (Two Years)
subject
keywords
Industrial Concentration, European Financial Crisis, Capital Formation, Dependence on External Finance
language
English
id
8879875
date added to LUP
2016-06-23 08:58:57
date last changed
2016-06-23 08:58:57
@misc{8879875,
  abstract     = {The global financial crisis of 2007 shook up the European economic landscape through many channels. However, deeper economic integration and the resulting industrial specialization patterns, can partly explain the different impacts across countries. Economic downturns are less likely to congest across borders if the industrial composition is less homogeneous. This essay analyzes the effects of the financial crisis on European manufacturing concentration. The chosen channel of capital formation however shows insignificant results when investigating a respective time frame, including the crisis years. Also the analysis of differences in the dependence for external finance across industries does not add remarkable explanatory power. Nevertheless, further pursued robustness checks indicate high importance of both of these factors when looking at the pre-crisis years in which a significant credit boom occurred. The results of these tests show a positive correlation between the concentration index in the comparison of individual industries over the analyzed country group and capital formation. It seems that in the period before the crisis, the location of capital-intensive industries is significantly affected by capital formation. The crisis might have temporarily broken this link and the importance of capital formation, in order for countries or industries to specialize.},
  author       = {Danninger, Philipp},
  keyword      = {Industrial Concentration,European Financial Crisis,Capital Formation,Dependence on External Finance},
  language     = {eng},
  note         = {Student Paper},
  title        = {Did the Global Financial Crisis Impact European Industrial Concentration?},
  year         = {2016},
}