Profit Persistence in the US: Evidence from a New Dataset

This paper analyzes the persistence of corporate rates of return for 187 surviving US firms from 1950-1999 using a new dataset. The results go in line with the existing literature bringing more evidence for profit persistence. The problem of profit cycles is treated using autoregressive models up to order four. A surprising result is that among the firms that did not converge to the norm there were more firms that performed below the norm than above.