On Modelling the Persistence of Profits in the Long Run: A Test of the Standard Model for 156 US Companies, 1950-99John Cable and Adelina Gschwandtner International Journal of the Economics of Business, 2008, vol. 15, issue 2, pages 245-263 Abstract: 'Persistence of profits' studies of competitiveness across samples of firms, and for individual firms, have almost always employed a simple first order autoregression model. Reservations over the use and interpretation of the AR1 in this context raise questions both over the reliability of previous results, and for future research strategy. We test the standard model on a common sample of 156 US companies over a 50 year period against a recently proposed, alternative model that adopts structural time series methods. A statistically significant degree of consistency is found between the two approaches in identifying firms persistently above or below the competitive norm in the long run. However, the structural time series method detects a much higher overall incidence of persistence, and appears to offer advantages in cases where the profit dynamics are more complex. Keywords: Profit Persistence; Competition; Structural Time Series (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: http://EconPapers.repec.org/RePEc:taf:ijecbs:v:15:y:2008:i:2:p:245-263 Ordering information: This journal article can be ordered from Access Statistics for this article International Journal of the Economics of Business is edited by Eleanor Morgan and H.E. Frech More articles in International Journal of the Economics of Business from Taylor and Francis Journals |
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