Polarisation and Reversion under Competition: Profitability of Indian Firms

Neng Jiang, Paul Kattuman and Ananya Kotia

International Journal of the Economics of Business, 2017, vol. 24, issue 2, 131-151

Abstract: We analyse profitability dynamics in a large emerging economy, India, over the two-and-a-half decades since economic liberalisation began in earnest. We find that the average rate at which Indian firms reverted to normal profitability increased significantly, particularly for firms earning supernormal profits. In contrast, firms earning below-normal profitability have been marked by little reversion to normal. Inducing underperforming firms to improve their profitability is of great policy importance. The pattern in profitability dynamics of Indian firms in the early years was consistent with a polarised long-run profitability distribution. The polarisation tendency was reversed in later years, but the projected long-run profitability distribution has a substantial underperforming tail.

Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/13571516.2017.1290750 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:ijecbs:v:24:y:2017:i:2:p:131-151

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/CIJB20

DOI: 10.1080/13571516.2017.1290750

Access Statistics for this article

International Journal of the Economics of Business is currently edited by Eleanor Morgan

More articles in International Journal of the Economics of Business from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().