The Propagation of Business Expectations within the European Union

Kukuvec, Anja; Oberhofer, Harald

doi:10.2139/ssrn.3570302

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The Propagation of Business Expectations within the European Union

CESifo Working Paper No. 8198

40 Pages Posted: 7 Apr 2020

See all articles by Anja Kukuvec

Anja Kukuvec

Vienna University of Economics and Business

Harald Oberhofer

Vienna University of Economics and Business - Department of Economics; Austrian Institute of Economic Research (WIFO)

Date Written: 2020

Abstract

This paper empirically investigates the propagation of fims' expectations within the European Union (EU). To this end, we combine EU-wide official business survey data with world input-output data. Econometrically, we model interdependencies in economic activities via input-output-linkages and apply space-time models with common factors. The resulting evidence provides indication for the existence of substantial spillovers in expectation formation. They are transmitted both upstream and downstream the European value chain, but the latter channel matters more.

Keywords: business expectation formation, propagation, input-output linkages, spillovers, space-time model

JEL Classification: C230, D840, E700, L140

Suggested Citation: Suggested Citation

Kukuvec, Anja and Oberhofer, Harald, The Propagation of Business Expectations within the European Union (2020). CESifo Working Paper No. 8198, Available at SSRN: https://ssrn.com/abstract=3570302 or http://dx.doi.org/10.2139/ssrn.3570302