The Persistence of Profits in the Long Run: A New Approach

Research output: Contribution to journalArticle

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Abstract

We present a trend-based alternative to the standard first-order autoregression
model in persistence of profits studies. This is motivated by reservations over
the interpretation of the standard model, and rests on a different concept of dynamic competition. A nine-category taxonomy of long-run persistence stereotypes is developed. Structural time series estimates are presented for a sample of UK companies. We find the null of long run competitive equilibrium not rejected in nearly a third of cases, but non-eroding persistence to be present in around 60%.
LanguageEnglish
Pages229-244
Number of pages16
JournalInternational Journal of the Economics of Business
Volume15
Issue number2
DOIs
StatusPublished - 2008

Fingerprint

Persistence of profits
Persistence
Competitive equilibrium
Reservation
Taxonomy
Autoregression
Stereotypes
Dynamic competition

Keywords

  • Profit persistence
  • Competition
  • Structural Time Series

Cite this

The Persistence of Profits in the Long Run : A New Approach. / Cable, John; Jackson, Richard H G.

In: International Journal of the Economics of Business, Vol. 15, No. 2, 2008, p. 229-244.

Research output: Contribution to journalArticle

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