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Persistence and Determinants of Firm Profit in Emerging Markets

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Stephan, A., Tsapin, A. Persistence and Determinants of Firm Profit in Emerging Markets. Applied Economics Quarterly, 54(4), 231-253. https://doi.org/10.3790/aeq.54.4.231
Stephan, Andreas and Tsapin, Andriy "Persistence and Determinants of Firm Profit in Emerging Markets" Applied Economics Quarterly 54.4, , 231-253. https://doi.org/10.3790/aeq.54.4.231
Stephan, Andreas/Tsapin, Andriy: Persistence and Determinants of Firm Profit in Emerging Markets, in: Applied Economics Quarterly, vol. 54, iss. 4, 231-253, [online] https://doi.org/10.3790/aeq.54.4.231

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Persistence and Determinants of Firm Profit in Emerging Markets

Stephan, Andreas | Tsapin, Andriy

Applied Economics Quarterly, Vol. 54 (2008), Iss. 4 : pp. 231–253

24 Citations (CrossRef)

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1Jönköping International Business School, DIW Berlin, Centre of Excellence for Science and Innovation Studies (CESIS), Royal Institute of Technology, Stockholm.

2Corresponding author. European University Viadrina, Frankfurt (Oder), Germany.

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Abstract

The 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.