Are Retailers More Sensitive to Changes in Business Conditions Compared to Wholesalers?
Halil D. Kaya

Abstract
This study examines the impact of macroeconomic factors like employment, industrial production, and real GDP on the performance of retailers and wholesalers. While previous studies focus on the relation between business cycles and firm performance, this current study looks at a better, more detailed index (i.e. the ADS Index) that measures daily values of business conditions in U.S. Using the ADS Index, this study compares how retailers and wholesalers are affected by the macroeconomic conditions. The results show that when the ADS Index increases by one unit, retailers’ profit margin, return on assets, and return on equity values increase by 0.19%, 0.05%, and 0.21%, respectively. The corresponding increases for wholesalers’ are 0.18%, 0.10%, and 0.34%. While the results for profitability are statistically significant for both groups, the liquidity results are weak. For retailers, only quick ratio is affected significantly. For wholesalers, none of the liquidity measures are affected by the business conditions.

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