Characterization of cyclical phases in the manufacturing industry in Spain
Abstract: The purpose of this
paper is to characterize the cyclical phases of the manufacturing industry in
Spain and detect which industries have more influence on the Spanish business
cycle. We assume that economic growth is a priority; we are going to determine
which industries have a more/less appropriate cyclical behavior according this
priority. We analyze if the industries with better cyclical behavior are the
ones that achieve greater co-movement with the business cycle of the Spanish
economy, as this means they have a positive influence on economic activity.
Design/methodology/approach: We examine the disaggregated quarterly IPI
data of 16 manufacturing industries. Our methodology follows three steps.
Firstly, we define cycle turning points; we follow the Harding and Pagan (2002)
methodology. Secondly, we characterize the cyclical phases of the manufacturing
industries in terms of duration, amplitude, deepness and steepness. We also
determine the degree of inter-industrial cyclical synchronization and between
industries in the cycle of the Spanish economy. This analysis is performed in
two ways. On the one hand, we use the concordance index and the correlation
coefficient. On the other hand, we work with indicators based on a consistency
table. In the Third step, we apply a multi-objective methodology, specifically
the compromise programming, to determine which industries have a more/less
appropriate cyclical behavior according to the growth priority.
Findings and Originality/value: The business cycle of the Spanish economy
is positively influenced by high- and medium-tech industries, which have
demonstrated their competitive capacity in international markets, and by
medium- low-tech industries, with major strengths in R&D, and in survival
and consolidation strategies. These results enable manufacturing industries to
exert a positive effect on the business cycle that is weakened because many of
them show a high correlation between employment and cyclical fluctuations.
Originality/value: The study is original and useful on various levels. Firstly,
the study of sectoral cycles makes it possible to identify common trends in the
growth of business activities and to see the interdependence of fluctuations.
Secondly, it will be easy to deduce which sectoral disruptions generate the
greatest impact on economic activity. Finally, because the analysis of the
manufacturing industry cycle has not yet carried out.
Author: Mercè Sala, Teresa
Torres, Mariona Farré
Journal Code: jptindustrigg140074
