Original scientific paper
https://doi.org/10.1080/1331677X.2016.1163948
A research for the competitive environment hypothesis in the short-run for the Turkish manufacturing industry
Omer Iskenderoglu
Ilhan Ozturk
Abstract
The competitive environment hypothesis is one of the basic ideas in
mainstream economic theory. It states that the competitive process
eliminates all economic profits and losses in the long-run so profits
do not persist. This article studies the competitive environment
hypothesis of 125 Istanbul Stock Exchange (ISE) quoted anufacturing
firms that survived during the period of 2009:1–2010:4, which can be
considered as the short-run. Net income after tax to total assets (return on assets [ROA]) and net income after tax to total equity (return on equity [ROE]) are both used as profit measures. Starting with Levin et al. and Im et al.’s panel unit root tests, pooled Ordinary Least Squares (OLS), panel fixed effects and cross-sectional analysis are employed. The results indicate that competitive environment hypothesis is viable and profits do not persist in the short-run.
Keywords
Competitive environment hypothesis; persistence; return on assets (ROA); returnon equity (ROE)
Hrčak ID:
171716
URI
Publication date:
22.12.2016.
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