Profit persistence revisited: The case of the uk

Citation

McMillan D & Wohar ME (2011) Profit persistence revisited: The case of the uk. Manchester School, 79 (3), pp. 510-527. http://www.scopus.com/inward/record.url?partnerID=yv4JPVwI&eid=2-s2.0-79955001698&md5=2f33069a98f8945fc8eafb4bcd4d3962; https://doi.org/10.1111/j.1467-9957.2010.02177.x

Abstract
We use data on 57 firms over the period 1980-2007 to investigate profit persistence. We extend the literature by considering whether the parameter governing persistence varies between positive and negative profits (relative to normal). Thus, we are able to differentiate between entry and exit as conduits of the competitive model. Such information may be of importance to policy-makers in establishing competition legislation. We find firms with profits above normal are firms that have high barriers to entry and exit while firms with below-normal profits have low barriers to entry and exit.

Journal
Manchester School: Volume 79, Issue 3

People

Professor David McMillan

Professor in Finance, Accounting & Finance