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Profitability and Capital Accumulation in Canadian Manufacturing Industries

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  • M Webber
  • S Tonkin

Abstract

In this paper, the relationship between profitability and rates of capital accumulation in twenty Canadian manufacturing industries is examined. Three separate analyses are performed: a short-run longitudinal study, a cross-sectional analysis, and a long-run longitudinal study. In each case, the rate of profit performs poorly as a determinant of the rate of accumulation in the manufacturing industries. If this result is real, rather than being because of inappropriate data or methods, then alternative determinants of investment behaviour must be sought, the emphasis placed by theorists on an equal rate of profit equilibrium is misplaced, and interpretations of capital flows in terms of relative profitability are misguided.

Suggested Citation

  • M Webber & S Tonkin, 1990. "Profitability and Capital Accumulation in Canadian Manufacturing Industries," Environment and Planning A, , vol. 22(8), pages 1051-1071, August.
    • Handle: RePEc:sae:envira:v:22:y:1990:i:8:p:1051-1071
    DOI: 10.1068/a221051
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    References listed on IDEAS

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    1. Robert Eisner, 1978. "Factors in Business Investment," NBER Books, National Bureau of Economic Research, Inc, number eisn78-1, July.
    2. Beach, Charles M & MacKinnon, James G, 1978. "A Maximum Likelihood Procedure for Regression with Autocorrelated Errors," Econometrica, Econometric Society, vol. 46(1), pages 51-58, January.
    3. M Storper, 1988. "Big Structures, Small Events, and Large Processes in Economic Geography," Environment and Planning A, , vol. 20(2), pages 165-185, February.
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    Cited by:

    1. Tsoulfidis, Lefteris & Tsaliki, Persefoni, 2011. "Classical competition and regulating capital: theory and empirical evidence," MPRA Paper 51334, University Library of Munich, Germany, revised 2013.

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