Profit Persistence at the Industry Level: Evidence from Polish Companies

• Autorzy: Marcin Puziak
• Języki publikacji: EN

Abstrakty

EN

Aim: Within the neoclassical microeconomics framework the long-term goal of the enterprise is to generate economic profit (above average profit). In case of competitive markets, the preservation of economic profit is impossible in the long run due to increasing competition. It is therefore important, both from the scientific and antitrust law perspective, to verify empirically whether companies' abnormal profits are characterized by a tendency to persist (persistence). The main objective of the study is to examine the level of profit persistence of Polish enterprises both at the aggregate level and at the level of industries. Design / Research methods: The abnormal profit persistence analysis was carried out on the basis of unbalanced panel data for 38253 Polish companies in 2006-2014 using the system GMM estimator. Conclusions / findings: The results obtained show that the abnormal profit of Polish companies in the analyzed period was characterized by low persistence both at the aggregate level and at the industry level, which indicates a high level of competition in the industries under investigation. Originality / value of the article: This paper contributes to the existing profit persistence literature in three ways. First, the analysis was conducted for a developing country. Second, the analysis was carried out both at aggregate and industry levels. Third, the analysis was conducted mainly for the period following the global financial crisis. Implications of the research: The results of the study are not only interesting from the scientific point of view, as they verify empirically the notions about long-run profitability of companies stemming from the theory of industrial organization, but equally important is that the results may be useful for antitrust policy and the assessment of the competitiveness of industries. Limitations of the research: Among the most important suggestions coming from the research conducted is that the future analyses need to focus on more narrowly defined markets, because further disaggregation can reveal significant differences in the abnormal profit persistence.(original abstract)

Słowa kluczowe

EN

Business profit; Enterprise profitability; Company's profit estimation

PL

Zysk przedsiębiorstwa; Rentowność przedsiębiorstwa; Szacowanie zysku przedsiębiorstwa

• Czasopismo: Central and Eastern European Journal of Management and Economics
• Rocznik: 2017
• Tom: 5
• Numer: nr 3
• Strony: 317--334

Twórcy

autor

Marcin Puziak

• Poznań University of Economics, Poland

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Identyfikatory

DOI

10.29015/ceejme.636