The Persistence of Profit Differentials in Indian Industry

Kambhampati, U. ORCID: https://orcid.org/0000-0001-5906-2394 (1995) The Persistence of Profit Differentials in Indian Industry. Applied Economics, 27 (4). pp. 353-261. ISSN 1466-4283

Abstract/Summary

The competitive process in a market economy is expected to work to eliminate profit differentials between firms/industries in the long run. In the Indian case, we note that quite a large number of industries experience above average profits that persist over time. Our analysis show that such persistence is higher in fast growing industries with high strategic barriers. On the other hand, government controls seem to be very effective in discouraging such persistence.