Profits: Rewards and Incentives in an Economic System to Allocate Capital

John E. Silvia ()

Chapter Chapter 10 in Financial Markets and Economic Performance, 2021, pp 345-369 from Springer

Abstract: Abstract Profit-seeking, not just religious freedom, was a motivation for the English colonists in America. In fact, the search for profit prompted many a voyage (Portuguese, British, and Dutch) of exploration. The pursuit of profits provides both the incentive and reward for economic activity. Profits provide the funds for capital investment and employment. Profits of the enterprise are the income to owners and shareholders. However, profits do not run in sync with economic growth and so a dynamic is set up where profit growth is sometimes strongest as the economy recovers from recession and slows as the economic recovery matures. Yet, there is often a disconnect between the ability of companies to deliver profits and the expectations of investors to reap these same profits. One interesting twist in recent years has been the willingness of investors to invest in capital gains rather than income.

Keywords: Profits as reward and incentive; Non-financial corporate profits; Profit margins-Profit per unit of Gross Value Added; Profits earned abroad; Profits recession; Income versus capital gain; Dutch Tulip Bulb Bubble (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:spr:sprchp:978-3-030-76295-7_10

Ordering information: This item can be ordered from
http://www.springer.com/9783030762957

DOI: 10.1007/978-3-030-76295-7_10

Access Statistics for this chapter

More chapters in Springer Books from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().