Explaining the persistence of profits: A time-varying approach

Adelina Gschwandtner and Jesus Crespo Cuaresma

Vienna Economics Papers from University of Vienna, Department of Economics

Abstract: The present paper analyzes the determinants of profit persistence using a newly developed methodology that allows for the persistence parameter to vary with time. It therefore addresses a significant limitation of previous persistence models, which have assumed unrealistically that persistence is fixed over relatively long period of 20 years upwards. The concentration and the size of the industry are found to have a significant positive impact on profit persistence. However, at firm level, market share and risk have surprisingly a negative impact on profit persistence.

JEL-codes: C22 L00 (search for similar items in EconPapers)
Date: 2008-06
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Journal Article: Explaining the Persistence of Profits: A Time-Varying Approach (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:vie:viennp:vie0806

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