Profit persistence in the food industry: Evidence from five European countries

Stefan Hirsch, Adelina Gschwandtner

Research output: Contribution to journalArticlepeer-review

67 Scopus citations

Abstract

The present article is the first that analyses profit persistence in the European food industry. Based on the Arellano and Bond GMM estimator, the degree of profit persistence and the drivers of persistence are quantified for a large sample of food processing firms. The analysis reveals that the degree of profit persistence in the food industry is lower compared with other manufacturing sectors due to strong competition among food processors and high retailer concentration. Furthermore, firm size is an important driver of persistence, while firm age, risk and R and D intensity have a negative influence.

Original languageEnglish
Pages (from-to)741-759
Number of pages19
JournalEuropean Review of Agricultural Economics
Volume40
Issue number5
DOIs
StatePublished - Dec 2013
Externally publishedYes

Keywords

  • Competitive environment hypothesis
  • Food industry
  • Profit persistence

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