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%.
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%.
| Original language | English |
|---|---|
| Pages (from-to) | 229-244 |
| Number of pages | 16 |
| Journal | International Journal of the Economics of Business |
| Volume | 15 |
| Issue number | 2 |
| DOIs | |
| Publication status | Published - 2008 |
Keywords
- Profit persistence
- Competition
- Structural Time Series