Transmission channels of the global economic crisis: Micro evidence for Macedonia

The 2008-2009 global recession, which originated in developed economies, has rapidly spilled over worldwide, hitting different economies with various intensity. The Macedonian economy was not an exception - the export sector suffered heavily, expectations deteriorated and household consumption declined subsequently. In this paper we aim to improve our understanding of the effects of the global crisis on the Macedonian economy by using disaggregated, firm-level data. As micro data generally contain richer information compared to aggregated data, this research provides useful information for policy-makers regarding the main weaknesses of the domestic economy, as well as regarding the actions needed to improve the resilience of the economy to future economic distress. The results suggest that firms that produce and sell domestically had relatively weaker performance. The trade channel appears important only for the main exporting group - the metal producers, whereas the financial channel did not play a significant role during the crisis.