Analysing Impact of Economic Crises on Sector Profits with a New Approach

Abstract

The manufacturing sector has been regarded as a key factor in the history of economic development and growth. However, economic fluctuations affect manufacturing seriously. This study examines the impact of the 2008 global economic crisis on Turkish manufacturing sector profitability. This paper uses micro-econometric difference in differences methods in conjunction with the macroeconomic forecasting method to investigate how profit levels in the Turkish manufacturing industry are affected by the crisis. The results indicate that the profit levels changed significantly after the crisis with a one-year lag and actual profits exceeded the estimated profits in the later years. Economic impacts of crises have long been investigated; however, this paper differs from the literature in using a new analytical framework for the issue. The suggested method can be expanded to other areas, which can spark new future studies.