Journal
EUROPEAN REVIEW OF AGRICULTURAL ECONOMICS
Volume 40, Issue 5, Pages 741-759Publisher
OXFORD UNIV PRESS
DOI: 10.1093/erae/jbt007
Keywords
profit persistence; competitive environment hypothesis; food industry
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Funding
- Austrian Science Fund (FWF) [V 58] Funding Source: researchfish
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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 RD intensity have a negative influence.
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