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The market share--profitability relationships in the securities industry

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  • Wenyi Chu
  • Chien-Nan Chen
  • Chuang-Hung Wang

Abstract

The market share--profitability relationships have been one of the most widely studied subjects in the management literature. Although it has long been argued that firms with high market shares are usually with high profitability, debates and disagreements exist mainly due to sampling, definitional, and measurement problems in existing studies. To avoid several biases often made in prior studies, this paper re-examined the market share--profitability relationships by using firms in a highly homogeneous and fragmented industry, the securities industry, as the research sample. The empirical results indicate that, in the securities industry, market share and the growth of market share are positively associated with firm profitability. Findings of this paper reaffirm the conventional wisdom of the relationships between market share and profitability.

Suggested Citation

  • Wenyi Chu & Chien-Nan Chen & Chuang-Hung Wang, 2008. "The market share--profitability relationships in the securities industry," The Service Industries Journal, Taylor & Francis Journals, vol. 28(6), pages 813-826, July.
    • Handle: RePEc:taf:servic:v:28:y:2008:i:6:p:813-826
    DOI: 10.1080/02642060801990379
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    References listed on IDEAS

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