Profits in the Long Run

Cover......Page 1
Frontmatter......Page 4
Contents......Page 10
Acknowledgments......Page 14
1 - The persistence of firms......Page 16
A. The hypothesis......Page 23
B. The models......Page 25
C. Some examples......Page 29
D. The results......Page 32
E. Predicting 1980 profitability......Page 42
F. Summary and implications......Page 46
A. The companies with persistently high or low profits......Page 48
B. Leadership stability by individual firms in separate markets......Page 54
C. The determinants of leadership stability......Page 58
D. The stability of market shares......Page 62
E. Conclusions......Page 64
4 - Profitability and market structure......Page 65
A. The industry approach to explaining firm profitability......Page 67
B. The firm approach to explaining firm profitability......Page 69
C. On modeling oligopolistic interdependence......Page 71
D. Empirical estimates: industry approach......Page 76
E. Empirical estimates: firm approach......Page 91
F. Conclusions......Page 94
5 - The results in perspective......Page 99
A. The profit profiles of selected companies......Page 100
B. A comparison with other structure-performance studies......Page 115
C. The use of accounting rates of return......Page 119
A. Profitability, firm advertising, and patent intensity......Page 125
B. Issues raised by the investment-like character of advertising and inventive activity......Page 133
C. Profitability and risk......Page 142
D. Growth, size, diversification, and profitability......Page 149
E. Conclusions......Page 153
A. Background......Page 155
B. Managerial discretion and corporate profitability......Page 161
C. The determinants of managerial compensation......Page 169
D. Summary and conclusions......Page 174
8 - Mergers and profitability......Page 178
A. The effects of mergers on profitability......Page 179
B. Estimates of the effects of merger activity on long-run profit projections......Page 182
C. The effects of mergers on profits: individual cross-sectional results......Page 186
D. The averaging effects of mergers: an example from the flat-glass industry......Page 190
E. Summary and conclusions......Page 192
A. The effects of changes in efficiency, product quality, and the degree of cooperation on market share......Page 195
B. Data and methodology......Page 202
C. The results......Page 205
D. Biases and caveats......Page 211
E. Discussion......Page 213
F. Conclusions......Page 217
A. The complete model......Page 220
B. Implications of the results for the structure-performance literature......Page 228
C. Implications for future research......Page 234
D. Policy implications......Page 238
Appendix 1 - Companies studied......Page 245
Appendix 2 - Industry categories......Page 270
Appendix 3 - Industry matchings......Page 353
Appendix 4 - Assets acquired data (Chapter 7)......Page 357
Appendix 5 - Mergers and market share: samples of merging companies......Page 359
Notes......Page 366
References......Page 373
Index......Page 386