The persistence of shocks to profitability

In this study, we use data for 1981 through 1994 on a large sample of U.S. companies to examine the persistence of incremental industry, corporate-par ent, and business-specific effects on profitability. Our results indicate t hat the incremental effects of industry on profitability persist longer tha n the incremental effects of the corporate parent and of the specific busin ess. Changes in industry structure have a more persistent impact on profita bility than do changes in firm structure.