Profits in the Long Run
Profits in the Long Run by Dennis C. Mueller, published by Cambridge University Press on April 3, 1986, is a comprehensive examination of profitability among large U.S. manufacturing firms. Spanning 378 pages, this book investigates whether persistent differences in profitability exist across firms and the factors that contribute to these disparities, utilizing data from the 1000 largest U.S. manufacturing companies in 1950 and 1972.
Readers will find an in-depth analysis of market power and profitability, revealing that firms with consistently high profits tend to maintain significant market shares and offer differentiated products. The book discusses the effects of mergers on profitability, noting that while they do not lead to synergistic gains, they can average out profits among companies. Additionally, it explores various factors influencing long-run profitability, such as risk, sales, diversification, growth, and managerial control, along with the implications for antitrust policy.
Official synopsis Publisher
Profits in the Long Run asks two questions: Are there persistent differences in profitability across firms? If so, what accounts for them? This book answers these questions using data for the 1000 largest US manufacturing firms in 1950 and 1972. It finds that there are persistent differences in profitability and market power across large US companies. Companies with persistently high profits are found to have high market shares and sell differentiated products. Mergers do not result in synergistic increases in profitability, but they do have an averaging effect. Companies with above normal profits have their profits lowered by mergers. Companies with initially below normal profits have them raised. In addition, the influence of other variables on long-run profitability, including risk, sales, diversification, growth and managerial control, is explored. The implications of antitrust policy are likewise addressed.
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