Persistence and Determinants of Firm Profit in Emerging Markets
AbstractThe paper studies the persistence of profit and its determinants in emerging markets. We apply Markov chain analysis, dynamic panel GMM estimation, and quantile regression techniques to a panel of approximately 3,000 Ukrainian companies. The empirical results show a moderate level of profit persistence, as well as a relatively low speed of adjustment to the steady-state profit level, thus providing no support for the hypothesis that there is a lower persistence of profits in emerging markets due to more intense competition. Regarding the determinants of firm profit in an emerging market economy, the findings from alternative methods reveal that ownership structure and regional location of the firm have a significant impact.
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Bibliographic InfoPaper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 848.
Length: 30 p.
Date of creation: 2008
Date of revision:
Profit; Persistence; Convergence; Markov chain analysis; Ukraine;
Other versions of this item:
- Andreas Stephan & Andriy Tsapin, 2008. "Persistence and Determinants of Firm Profit in Emerging Markets," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot, Berlin, vol. 54(4), pages 231-254.
- Stephan, Andreas & Tsapin , Andriy, 2008. "Persistence and Determinants of Firm Profit in Emerging Markets," Working Paper Series in Economics and Institutions of Innovation 151, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- G30 - Financial Economics - - Corporate Finance and Governance - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-01-31 (All new papers)
- NEP-BEC-2009-01-31 (Business Economics)
- NEP-CFN-2009-01-31 (Corporate Finance)
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- Giorgio Canarella & Stephen M. Miller & Mahmoud M. Nourayi, 2012.
"Firm Profitability: Mean-Reverting or Random-Walk Behavior?,"
1202, University of Nevada, Las Vegas , Department of Economics.
- Canarella, Giorgio & Miller, Stephen M. & Nourayi, Mahmoud M., 2013. "Firm profitability: Mean-reverting or random-walk behavior?," Journal of Economics and Business, Elsevier, vol. 66(C), pages 76-97.
- Giorgio Canarella & Stephen M. Miller & Mahmoud M. Nourayi, 2012. "Firm Profitability: Mean-Reverting or Random-Walk Behavior?," Working papers 2012-05, University of Connecticut, Department of Economics, revised Oct 2012.
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- Keshari, Pradeep Kumar, 2013. "Efficiency spillovers from FDI in the Indian machinery industry: a firm-level study using panel data models," MPRA Paper 47070, University Library of Munich, Germany.
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"La profitabilité des secteurs de l’économie sénégalaise
[Profitability of economic sectors in Senegal]," MPRA Paper 54921, University Library of Munich, Germany.
- John Goddard & Hong Liu & Phil Molyneux & John O.S. Wilson, 2010.
"The Persistence of Bank Profit,"
10002, Bangor Business School, Prifysgol Bangor University (Cymru / Wales).
- Andreas Stephan & Andriy Tsapin & Oleksandr Talavera, 2009.
"Why Do Firms Switch Their Main Bank?: Theory and Evidence from Ukraine,"
Discussion Papers of DIW Berlin
894, DIW Berlin, German Institute for Economic Research.
- Stephan, Andreas & Tsapin, Andriy & Talavera, Oleksandr, 2009. "Why Do Firms Switch Their Main Bank? - theory and evidence from Ukraine," Working Paper Series in Economics and Institutions of Innovation 180, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
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