Kaplan, Muhittin and Aslan, Alper (2006): Persistence of Profitability and the Dynamics of Competition in Turkey, 1985-2004. Forthcoming in: The Empirical Economics Letters
Download (63kB) | Preview
The existing empirical literature on the intensity of competition in developing countries shows that the persistence of profitability is smaller in developing than in advanced economies. To solve this controversy, Glen, Lee and Singh (2003) propose to look into the underlying sources of the persistency, namely persistency of monopoly power and of economic efficiency. This paper reports on time series analysis of the persistence of corporate profitability and its constituent parts for the largest 114 manufacturing firms in Turkey. Its central result is that the observed persistency of profits in the markets is due to persistency of productivity rather than the persistency of profit margins suggesting that pro-competitive characteristics of markets overweigh the inimical competition characteristics in Turkey.
|Item Type:||MPRA Paper|
|Original Title:||Persistence of Profitability and the Dynamics of Competition in Turkey, 1985-2004|
|Keywords:||Persistence of profitability,Economic efficiency|
|Subjects:||D - Microeconomics > D2 - Production and Organizations > D21 - Firm Behavior: Theory
L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance
|Date Deposited:||19. Sep 2008 13:30|
|Last Modified:||26. Feb 2015 10:54|
Demsetz, Harold, 1974. Two systems of belief about monopoly, in Industrial Concentration: The New Learning (Eds) H. Goldscmid, H. Mann and J. Weston, Little Brown, Boston, pp. 164-184.
Demsetz, Harold, 1989. Efficiency, competition and policy: the organisation of economic activity, vol. 2, Blackwell Publishing, Oxford.
Engin, Nazım, Katircioglu, Erol, 1994. Turkish Experience of Import Liberalisation andP rice-Cost Margins, Istanbul Chamber of Industry Research Centre, No.1994/5,Istanbul, (in Turkish).
Foroutan, Faezeh, 1991. Foreign trade and its relation to competition and productivity in Turkish industry. PRE Working Paper Series, No. 604, World Bank, Washington, D.C.
Geroski, Paul, 1990. Modelling Persistent Profitability, in The Dynamics of Company Profits: An International Comparison, (Ed.) D. C. Muller, Cambridge University Press, Cambridge, pp.15-34.
Geroski, Paul, Jacquemin, Alexis, 1988. The persistence of profits: A European Comparison, Economic Journal. 98, pp. 375-389.
Glen, Jack, Lee, Kevin, Singh, Ajit, 2003. Persistence of profitability and competition in emerging markets. Economics Letters, 72, 247-53.
Glen, Jack, Lee, Kevin, Singh, Ajit, 2003. Corporate profitability and the dynamics of competition in emerging markets: A time series analysis, Economic Journal, 113, 465-484.
Goddard, Julia, Wilson, Jos, 1999. The persistence of profit: a new empirical interpretation, International Journal of Industrial Organization, 17, 663-87.
Im, Kyung, Pesaran, Hashem, Shin, Yongcheol,2003. Testing for unit roots in heterogeneous panels, Journal of Econometrics, 115, 53-74.
Kambahampati, Uma Sarada, 1995. The persistence of profit differentials in Indian industry, Applied Economics, 27, 353-61.
Katircioglu, Erol, 1989. Industrial concentration in Turkish manufacturing industries:1975 1985, Journal of Contemporary Management, 2, 31-40.
Lee, Norman, 1992. Market structure and trade in the developing countries, in Trade Policy, Industrialization and Development: New Perspectives (Ed.) G. K.Helleiner Clarendon Press, Oxford, pp. 89-121.
Mueller, Dennis, 1990. The dynamics of company profits: An international comparison,Cambridge University Press, Cambridge.
Odagiri, Hiroyuki, Yamawaki, Hideki, 1990. Persistence of profits in Japan, in The Dynamics of Company Profits: An International Comparison (Ed.) D. C. Mueller, Cambridge University Press, Cambridge, pp. 129-146.
Maruyama, Nobuhiro, Odagiri, Hiroyuki 2002. Does the 'persistence of profits' persist?:A study of company profits in Japan, 1964-97, International Journal of Industrial Organization, 20, 1513-33.
Rodrik, Dani, 1988. Imperfect competition, scale economies, and trade policy in developing countries, in Trade Policy Issues and Empirical Analysis (Ed.) R.E. Baldwin, University of Chicago Press, Chicago.
Singh, Ajit, 2003. Competition, corporate governance and selection in emerging markets, Economic Journal, 113, F 443-64.
Tybout, James, 1992. Linking trade and productivity: New research directions, World Bank Economic Review, 6, 189-211.
Tybout, James 2000. Manufacturing firms in developing countries: How well do they do and why?, Journal of Economic Literature, 38, 11-44.
Yurtoglu, Burçin, 2004. Persistence of firm-level profitability in Turkey, Applied Economics, 36, 615-25.
Yalcin, Cihan, 2000. Price-cost margins and trade liberalisation in Turkish manufacturing industry: A panel data analysis, Central Bank of the Republic of Turkey, Research Department, March, mimeo.