Explaining the Persistence of Profits: A Time-Varying Approach |
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Authors: | Adelina Gschwandtner Jesus Crespo Cuaresma |
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Affiliation: | Vienna University of Economics and Business , Augasse 2–6, 1090 Vienna, Austria |
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Abstract: | The present paper analyzes the determinants of profit persistence using a newly developed methodology that allows the persistence parameter to vary with time. It therefore addresses a significant limitation of previous persistence models, which have assumed unrealistically that persistence is fixed over relatively long periods of 20 years and upwards. The concentration of the industry is found to have a significant positive impact on profit persistence. However, at firm level, market share and risk have a surprisingly negative impact |
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Keywords: | Profit Persistence Competition Time-varying Dynamic Panel |
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