Title: Cross-sectoral variation in the volatility of plant-level idiosyncratic shocks
Description: "We estimate plant--level idiosyncratic risk in the U.S.  manufacturing sector.  Our proxy for risk is the volatility of the portion of TFP growth which is not explained by either industry- or economy-wide factors, or by establishments' characteristics systematically associated with growth itself.  Consistent with previous studies, we find that idiosyncratic shocks are much larger than aggregate random disturbances, accounting for about 90% of the overall uncertainty faced by plants.  The extent of cross-sectoral variation in idiosyncratic risk is remarkable.  Plants in the most volatile sector are subject to at least three times as much uncertainty as plants in the least volatile.  Our evidence indicates that idiosyncratic risk is higher in industries where the extent of creative destruction is likely to be greater"--National Bureau of Economic Research web site.