The 2008-2009 automotive industry crisis and regional unemployment in Central Europe

This paper evaluates the influence of the broadly defined automotive industry on regional increases in unemployment in the Czech Republic (Czechia) during the 2008-2009 economic crisis. Drawing on a unique database of 490 firms with 20 or more employees each and a survey of 274 firms, we employ eight indicators to explain changes in the microregional unemployment rate between August 2008 and August 2009. We also introduce and calculate the value creation potential, employment stability potential and regional labour market vulnerability index for each firm and investigate the relationship between a firm's position in the value chain and its propensity to dismiss workers.