No abstract

Purpose: To gain more knowledge about the profit rate and whether it persists over time for campsites. Many international articles have analysed the degree of profit persistence but in other sectors than campsites.This provides insight in how the market for campsites works. An anlasis of profit persistence for Norwegian campsites is relevant for the rest of the tourist sector as well as campsites in other countries. Design/Methodology/Approach: The study is based on public available data for the last 10 years for all Norwegian campsites and consists of 292 firms where 164 are included in this research. A quantitative approach (regression models) using panel data and system GMM estimators. Hypothesis testing. Finding: The findings indicate that there is a positive significant profit persistence for those campsites with high initial profits. Furthermore, the relative profit rates depend on firmspecific factors. There is a significant positive correlation between growth and profit rate, and there is also a negative link between debt ratio and profit rate for firms with an initial low profit rate. Company size does not have significant impact on the profit rate. Practical implications: The existence of profit persistence suggests an absence of wellfunctioning market. Companies can do it worse or better than the sector average over a longer period. This provides knowledge about which companies are resilient and weak. This is important information for banks and others who provide loans. Originality/value: This study implements a method to identify the speed of adjustment to normal profit in the campsites sector. There are few studies that have applied this method for Norwegian companies and for campsites wordwide. By using GMM (general method of moments) one gets more consistent estimators than OLS (ordinary least squares).

Although campsites are an important segment of the tourist sector, few applied articles have analyzed their growth path and tested Gibrat’s Law for firms within this industry. This knowledge can be of importance to the authorities when analyzing the regional impacts of growth in this sector. With government statistics from the last decade, we use a GMM framework to test the stricter version of Gibrat’s Law, which consist of three parts: the campsites’ growth trend, how they carry over success and failure, and how volatile their size is. The first and third part are rejected for Norwegian campsites, leading to a rejection of Gibrat’s Law. To see if firms of different sizes follow different dynamics, we split the sample in three parts. Here, we find evidence of a threshold size, as large campsites follow a fundamentally different dynamic than small and medium campsites. Specifically, large campsites gain no stability in revenue by further increases in size, whereas they carry over success/failure across years. The opposite is true for the rest of the sector. Gibrat’s Law is rejected on at least one count for each of the sub-samples. Lastly, we supplement the analysis with economy-wide and firm-specific variables to test further hypotheses.

The restaurant industry is quite similar across borders. It is a labour-intensive industry that is important for tourism and employment. It consists mainly of many small businesses that are regionally dispersed. There are many studies that have analysed this sector. However, rather few articles have focused on the dynamics of growth and profit. The purpose of this paper is to apply the theory of profit persistence and the law of proportionate effect (LPE) to Norwegian restaurants by using publicly available public panel data from 2010 to 2019. The sample includes 866 restaurants. One important finding is that Gibrat’s law (LPE) does not seem to hold, meaning the growth is not independent of the size of the firms. Small businesses grow faster than the others, and they are also more profitable. There is some degree of profit persistence in the restaurant industry. Profitability is negatively linked to debt ratios but positively related to working capital. The study shows there is a trade-off between size and profit. These findings are useful for the industry and for others (public planning, lenders, and more).