Profitability and Concentration in Australian Manufacturing Industries 1970‐71 to 1972‐73:A Further Examination

Abstract

In a recent issue of the Economic Record, D. K. Round found that, using I.A.C. data for 32 industries for the period 1970‐71 to 1972–1973, sales‐based measures of profitability were linked positively and significantly with concentration, but that funds‐based measures showed a negative relationship. In this paper, the I AC profitability ratios are adjusted from an historical cost to a current value basis. Regressions of the adjusted profitability ratios on concentration, over the period 1970‐71 to 1972‐73, conflict with Round's finding that the concentration coefficient using net profit/sales was significant, and a much weaker relationship is found with all of the regressions that used adjust..