Transient Industry Effects. How Much are Industries Exposed?
46 Pages Posted: 7 Dec 2015
Date Written: November 19, 2015
An important factor contributing to performance heterogeneity is transient industry effects. In this paper, we explore the importance of such effects in the cava, beer and automotive sectors, using the methodology of Ariño et al. (2008). We assess the exposure of these industries to the business cycle and measure the intensity of their responsiveness. Further, the scope of our analysis includes key social and political events which may help managerial decision making. Our study draws on consumer attitudes and changing habits, as well as the effectiveness of government intervention schemes. This paper contributes to the transient industry literature by providing new insights on the importance of transient effects. The application of the transient industry effects model allows us to identify lasting changes in the relationship of an industry and the business cycle, as well as important external shocks whose impact cannot be neglected in the strategic planning and decision making by managers and policy makers.
Keywords: transient industry effects; business cycle; cava; beer; automotive
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