Business Cycles within the Dutch Floricultural Industry Student David van der Weiden Master thesis MSc in Economics and Business Accounting & Finance
Thesis supervisors Prof. E.A. de Groot Prof. P.H.B.F. Franses 16th January 2013, Rotterdam
Content • • • • • • •
Subject and contribution; Research question; Research method; Sample selection; Results; Findings in relation to literature; Conclusion.
Subject and contribution â€˘ Business cycles in economic variables o Burns (1951): cycles are widely diffused in the economy; o Den Reijer (2006): depth, duration and diffusion; o No consensus on drivers of cycles; o De Groot and Franses (2008): clustering of cycles. â€˘ Contribution to both academic and business field.
Research question Do the floricultural industry and real Dutch GDP share the same business cycle length(s)? â€˘ Comparability of variables o Export orientated; o Focused on European markets; o Binding of international trade flows; o European business cycle co-movement
Research methodology • De Groot and Franses (2008). • Autoregressive model with harmonic regressors. • Cycles in data are partly stochastic and deterministic. (equation 1 and 2)
• H0 : β’s = 0. If H0 is rejected Ci is found to be significant.
Empirical results • Multiple cycles within the data; • Cycles cluster around the Fibonacci sequence (De Groot and Franses, 2011);
Based on Table 5
Findings in relation to literature Do the floricultural industry and real Dutch GDP share the same business cycle length(s)? • Share same business cycle structure; • De Groot and Franses (2006) and Van Ruth et al. (2005): Dutch business cycle lengths 5.5 years and 10.5 years; • De Groot and Franses (2011): international and historical time series cluster around Fibonacci sequence.
Forecasts Dutch Floricultural Industry
2,00% 1,50% 1,00% 0,50%
Based on Table 6
Cumulative forecasted growth in % per year
Conclusion • Burns (1951): cycles are widely diffused in the economy. Applicable for Dutch Floricultural industry. • To date no business cycle study focused on floricultural businesses. • Cycles are cluster around the Fibonacci sequence • Extrapolation of multiple cycle approach generates forecasts up to 2020.
Business Cycles within the Dutch Floricultural Industry â€œFor a copy of the master thesis Please email me at: email@example.com â€œ
The Dutch floricultural industry, similar to the aggregate economy, relies on (re)exporting activities and represents the trading ‘hub’ with...