Global Advanced Research Journal of Agricultural Science (GARJAS) ISSN: 2315-5094
April 2019 Vol. 8(4): pp. 151-158
Copyright © 2019 Global Advanced Research Journals

 

Full Length Research Paper

Profit persistence examination in the Hungarian agriculture

Tibor Bareith

Assistant lecturer at Department of Finance and Economics, Kaposvár University, Kaposvár, Hungary and

PhD Student at Pallas Athene Domus Education is Foundation, Budapest, Hungary H-7400, Kaposvár, Guba Sándor str. 40.

.*Corresponding Author's Email: mbareith.tibor@ke.hu

Accepted 26 February, 2019

 

Abstract

In this study I examine the profit persistence of the entire Hungarian agriculture with dynamic panel GMM estimation. The estimated profit persistence is low (close to zero) but is significant. There are many small farmers in Hungary; this market structure is closest to the perfect competition where the abnormal profit is zero. Based on the model, companies with a fast growth rate can gain abnormal profits. Persistence is mostly reduced by the share of subsidies received, i.e. non-refundable subsidies compensate for market competition and direct economies towards equilibrium profit. Taking short and long-term risk has a negative impact on profit persistence.

Keywords: abnormal profit, profit persistence, firm performance, agriculture

 

 

 

 

REFERENCES

 

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