2017

Bailing on the Car That Was Not Bailed Out: Bounding Consumer Reactions to Financial Distress

Reprint No. 2017:32

Author(s): Christian Huse and Nikita KoptyugYear: 2017 Title: Journal of Economics & Management Strategy Volume (No.): 26 (2) Pages: 337–374
Online article (restrictions may apply)
Preliminary version


We examine how consumers react to the financial distress of durable goods manufacturers by studying the Swedish new car market. We employ a difference-in-differences matching methodology whereby we compare sales of carmaker Saab with those of a control group of substitute products. To account for possible substitution between products in the treatment and control groups, we propose and apply bounds to our difference-in-differences matching estimator. We then refine the bounds and provide conditions under which they depend only on product elasticities. We find that there was a significant decrease in the sales of Saab following its filing for administration.


Reference:
Huse, Christian and Nikita Koptyug (2017), "Bailing on the Car That Was Not Bailed Out: Bounding Consumer Reactions to Financial Distress". Journal of Economics & Management Strategy 26(2), 337–374.

Nikita Koptyug

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Interdisciplinary European Studies

Trust in the European Union in Challenging Times

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This is the first book in the Interdisciplinary European Studies collection. This volume provides an interdisciplinary perspective on trust in the EU from the vantage point of political science, law and economics. Lars Oxelheim, Lund University and affiliated to IFN, is one of the authors.

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