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A portfolio analysis of industrial structure
Author(s)
Date Issued
2003-03
Date Available
2009-07-21T15:33:59Z
Abstract
Industrial sectors producing income-elastic products can grow rapidly but are highly
vulnerable to fluctuations in the world economy. Policymakers need to take into
account this trade-off between output and employment growth over the longer term
and volatility in the short to medium term. We bring the principles of portfolio theory to bear on the issue. Our analysis is applied to Irish manufacturing employment where growth has been concentrated in foreign-owned sectors such as Office and Data Processing Equipment, Pharmaceuticals and Professional Instruments. We show that, increased volatility notwithstanding, the country’s hightech FDI-driven strategy has brought the economy’s industrial portfolio closer to the mean-variance efficiency frontier.
Type of Material
Working Paper
Publisher
University College Dublin. School of Economics
Series
UCD Centre for Economic Research Working Paper Series
WP03/09
Classification
O21
R30
G11
Subject – LCSH
Industrial organization (Economic theory)
Investment analysis
Language
English
Status of Item
Not peer reviewed
This item is made available under a Creative Commons License
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