The Within-Distribution Business Cycle Dynamics of German Firms

48 Pages Posted: 8 Jun 2016

See all articles by Jörg Döpke

Jörg Döpke

Deutsche Bundesbank

Sebastian Weber

University of Hamburg

Date Written: 2006

Abstract

We analyse stylised facts for Germany's business cycle at the firm level. Based on longitudinal firm-level data from the Bundesbank's balance sheet statistics covering, on average, 55,000 firms per year from 1971 to 1998, we estimate transition probabilities of a firm in a certain real sales growth regime switching to another regime in the next period, e.g. whether a firm that has witnessed a high growth rate is likely to stay in a regime of high growth or is bound to switch in a regime of low growth in the subsequent period. We find that these probabilities depend on the business cycle position.

Keywords: business cycles, firm growth, Markov chains

JEL Classification: D21, D92, E32

Suggested Citation

Döpke, Jörg and Weber, Sebastian, The Within-Distribution Business Cycle Dynamics of German Firms (2006). Bundesbank Series 1 Discussion Paper No. 2006,29, Available at SSRN: https://ssrn.com/abstract=2785256 or http://dx.doi.org/10.2139/ssrn.2785256

Jörg Döpke (Contact Author)

Deutsche Bundesbank ( email )

Wilhelm-Epstein-Str. 14
Frankfurt/Main, 60431
Germany
+49-069-9566-3051 (Phone)

Sebastian Weber

University of Hamburg ( email )

Allende-Platz 1
Hamburg, 20146
Germany

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