Empirica – Journal of European Economics

Sponsored by the Austrian Economic Association and the Austrian Institute of Economic Research

Empirica publishes empirical and theoretical work on all economic aspects of European Integration. The topics may range from all challenges concerning the deepening of the European Union (Single Market, Lisbon Agenda, EMU) to enlargement and the external relations of the EU (globalisation).

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Johan E. Eklund, Emma Lappi
Persistence of profits in the EU: how competitive are EU member countries?
Empirica, 2019, 46(2), S.327-351, http://www.springer.com/10663
Profits that persist above or below the norm for prolonged periods of time reveal a lack of competition and imply a systematic misallocation of resources. Competition, if unimpeded, should restore profits to normal levels within a relatively short time frame. The dynamics of profits can thus reveal a great deal about the competitiveness of an economy. This paper estimates the persistence of profits across the European Union, which adds to our understanding of the competitiveness of 18 EU member countries. By using a sample of approximately 4,700 firms with 51,000 observations across the time period of 1995-2013, we find differences in the persistence of short-run profits, implying that there are differences in competitiveness across the EU. The Czech Republic and Greece are among the countries with the highest profit persistence, whereas the UK is among those with the lowest persistence of profits. Furthermore, we provide evidence that there are significant permanent rents present in the EU across countries as well as in the different broad sectors across the EU.
Forschungsbereich:Industrieökonomie, Innovation und internationaler Wettbewerb
Sprache:Englisch

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Univ.-Prof. Mag. Dr. Fritz Breuss

Funktion: Wissenschaftlicher Mitarbeiter, Managing Editor Empirica