Tracing the Dynamics of Competition: Evidence from Company Profits

6 Pages Posted: 18 Apr 2008

See all articles by Jesús Crespo Cuaresma

Jesús Crespo Cuaresma

University of Innsbruck - Department of Economic Theory, Economic Policy and Economic History

Adelina Gschwandtner

Vienna University of Economics and Business; University of Vienna

Abstract

This article proposes a simple approach to analyzing profit dynamics, which allows for time-varying persistence of profits. The time series model is a simple autoregressive process where the dynamics of the persistence parameter follow an autoregressive process. Using the longest time series available on profits for more than a hundred U.S. firms, we find that there is ample evidence of time variation in the persistence parameter.

JEL Classification: L00, C22

Suggested Citation

Crespo Cuaresma, Jesús and Gschwandtner, Adelina, Tracing the Dynamics of Competition: Evidence from Company Profits. Economic Inquiry, Vol. 46, Issue 2, pp. 208-213, April 2008. Available at SSRN: https://ssrn.com/abstract=1120565 or http://dx.doi.org/10.1111/j.1465-7295.2007.00062.x

Jesús Crespo Cuaresma (Contact Author)

University of Innsbruck - Department of Economic Theory, Economic Policy and Economic History ( email )

Universitaetsstrasse 15
Innsbruck, A - 6020
Austria

Adelina Gschwandtner

Vienna University of Economics and Business ( email )

Wien 1090
Austria
(00431) 31336 4494 (Phone)

HOME PAGE: http://agschwandtner.pbworks.com/

University of Vienna ( email )

Bruenner Strasse 72
Vienna 1210, Vienna
Austria
(00431)4277 37480 (Phone)
(00431)4277 37489 (Fax)

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