The contribution of firm-level shocks to aggregate fluctuations: The case of Sweden

•We decompose the structure of aggregate fluctuations using Swedish micro-data.•Firm-specific and sector-destination components contribute about equally to aggregate sales volatility.•Compared to France, Sweden has higher overall volatility and a lower firm-specific component.

We use annual observations on sales at the firm-destination level of all Swedish firms for 1997-2008 to examine the contribution of firm-level shocks to aggregate fluctuations. The firm-specific and sector-destination components each contribute about equally to aggregate sales volatility. For export volatility, the firm-specific component is more important. The analysis is conducted so as to ease a comparison to earlier results using French data. Compared to the French case the Swedish data show greater granularity and greater overall volatility, but also a lower firm-level contribution to aggregate volatility.