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Persistence of firm-level profitability in the European dairy processing industry

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  • Stefan Hirsch
  • Monika Hartmann

Abstract

Based on autoregressive (AR) models and Arellano-Bond dynamic panel estimation, this article analyses profit persistence in the European dairy processing industry. The sample comprises 590 dairy processors from the following five countries: Belgium, France, Italy, Spain, and the United Kingdom. The AR models indicate that cooperatives which account for around 20% of all firms in the dairy processing sector are not primarily profit oriented. In addition, the results point toward a high level of competition as profit persistence is rather low even if cooperatives are excluded. The panel model reveals that short- as well as long-run profit persistence is influenced by firm and industry characteristics.

Suggested Citation

  • Stefan Hirsch & Monika Hartmann, 2014. "Persistence of firm-level profitability in the European dairy processing industry," Agricultural Economics, International Association of Agricultural Economists, vol. 45(S1), pages 53-63, November.
    • Handle: RePEc:bla:agecon:v:45:y:2014:i:s1:p:53-63
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