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Persistence of profits in the EU: How competitive are EU member countries?
Blekinge Institute of Technology, Faculty of Engineering, Department of Industrial Economics.
Swedish Entrepreneurship Forum, SWE.
2018 (English)In: Empirica, ISSN 0340-8744, E-ISSN 1573-6911, ISSN 0340-8744Article in journal (Refereed) Epub ahead of print
Abstract [en]

Profits that persist above or below the norm for prolonged periods of time reveal a lack of competition and imply a systematic misallocation of resources. Competition, if unimpeded, should restore profits to normal levels within a relatively short time frame. The dynamics of profits can thus reveal a great deal about the competitiveness of an economy. This paper estimates the persistence of profits across the European Union (EU), which adds to our understanding of the competitiveness of 18 EU member states. By using a sample of approximately 4700 firms with 51,000 observations across the time period of 1995–2013, we find differences in the persistence of short-run profits, implying that there are differences in competitiveness across the EU. The Czech Republic and Greece are among the countries with the highest profit persistence, whereas the United Kingdom is among those with the lowest persistence of profits. Furthermore, we provide evidence that there are significant permanent rents present in the EU across countries as well as in the different broad sectors across the EU. © 2018 The Author(s)

Place, publisher, year, edition, pages
Springer-Verlag New York, 2018.
Keyword [en]
Competition, Competitiveness, European Union, Persistence of profits
National Category
Business Administration
Identifiers
URN: urn:nbn:se:bth-15973DOI: 10.1007/s10663-018-9399-5OAI: oai:DiVA.org:bth-15973DiVA, id: diva2:1192235
Available from: 2018-03-22 Created: 2018-03-22 Last updated: 2018-03-22Bibliographically approved

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Eklund, Johan

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  • Other locale
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