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Profit Persistence in the "Very" Long Run: Evidence from Survivors and Exiters

One of the main shortcomings of the profit persistence literature is the fact that it looks only at surviving companies. This paper uses a unique dataset to analyze profit persitstence in two different stationary series: 85 surviving US companies from 1950-1999 and 72 exiters. While the exiters perform more competitive than the survivors there is still significant evidence for persitstence in both samples. Concentration and growth of the industry as well as size and volatility of profits seem to play an important role in explaining persistence.

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File URL: http://homepage.univie.ac.at/Papers.Econ/RePEc/vie/viennp/vie0401.pdf
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Paper provided by University of Vienna, Department of Economics in its series Vienna Economics Papers with number 0401.

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Date of creation: Feb 2004
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Handle: RePEc:vie:viennp:0401
Contact details of provider: Web page: http://www.univie.ac.at/vwl

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  11. Geroski, Paul A & Jacquemin, Alexis, 1988. "The Persistence of Profits: A European Comparison," Economic Journal, Royal Economic Society, vol. 98(391), pages 375-89, June.
  12. Carlos Alós Ferrer & Ana B. Ania, 2002. "The Evolutionary Logic of Feeling Small," Vienna Economics Papers 0216, University of Vienna, Department of Economics.
  13. Schlag, Karl H., 1994. "Why Imitate, and if so, How? Exploring a Model of Social Evolution," Discussion Paper Serie B 296, University of Bonn, Germany.
  14. Dixit, A., 1988. "Entry And Exit Decisions Under Uncertainty," Papers 91, Princeton, Department of Economics - Financial Research Center.
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  18. Brock, William A. & Hommes, Cars H., 1998. "Heterogeneous beliefs and routes to chaos in a simple asset pricing model," Journal of Economic Dynamics and Control, Elsevier, vol. 22(8-9), pages 1235-1274, August.
  19. Kirman, Alan, 1993. "Ants, Rationality, and Recruitment," The Quarterly Journal of Economics, MIT Press, vol. 108(1), pages 137-56, February.
  20. Chang, Yoosoon, 2002. "Nonlinear IV unit root tests in panels with cross-sectional dependency," Journal of Econometrics, Elsevier, vol. 110(2), pages 261-292, October.
  21. Tanaka, Yasuhito, 2000. "A finite population ESS and a long run equilibrium in an n players coordination game," Mathematical Social Sciences, Elsevier, vol. 39(2), pages 195-206, March.
  22. Ana B. Ania, 2000. "Learning by Imitation when Playing the Field," Vienna Economics Papers 0005, University of Vienna, Department of Economics.
  23. Glen, Jack & Lee, Kevin & Singh, Ajit, 2001. "Persistence of profitability and competition in emerging markets," Economics Letters, Elsevier, vol. 72(2), pages 247-253, August.
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