TRACING THE DYNAMICS OF COMPETITION: EVIDENCE FROM COMPANY PROFITS

Jesus Crespo Cuaresma and Adelina Gschwandtner

Economic Inquiry, 2008, vol. 46, issue 2, 208-213

Abstract: This article proposes a simple approach to analyzing profit dynamics, which allows for time‐varying persistence of profits. The time series model is a simple autoregressive process where the dynamics of the persistence parameter follow an autoregressive process. Using the longest time series available on profits for more than a hundred U.S. firms, we find that there is ample evidence of time variation in the persistence parameter. (JEL L00, C22)

Date: 2008
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https://doi.org/10.1111/j.1465-7295.2007.00062.x

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