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The Determinants of Firm Profitability in Australian Manufacturing

journal contribution
posted on 2023-05-16, 11:53 authored by McDonald, JT
This study provides new evidence on the determinants of the profitability of Australian manufacturing firms by analyzing a unique firm-level data set of firm performance over the period 1984-93. The panel nature of the data permits the estimation of dynamic profitability models over the business cycle, to test both the persistence and cyclicality of firm profitability. Econometric results suggest that lagged profitability is a significant determinant of current profit margins, and that industry concentration is positively related to firm profit margins. Also, profit margins are found to be procyclical in concentrated industries but counter-cyclical in less concentrated industries.

History

Publication title

The Economic Record

Volume

75

Issue

229

Pagination

115-126

ISSN

0013-0249

Department/School

TSBE

Publisher

The Economic Society of Australia

Repository Status

  • Restricted

Socio-economic Objectives

Industry costs and structure

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    University Of Tasmania

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