Do Digital Technology Firms Earn Excess Profits? Alternative Perspectives
نویسندگان
چکیده
ABSTRACT Despite regulators’ allegations that digital technology giants misuse their market power to earn abnormal profits, there is a dearth of systematic work on (1) whether digital-tech firms in general, and tech particular, excess profits or (2) profitability, if any, due power. We use two alternative measures economic profitability addition accounting rate return (ARR): internal (IRR), which equates current investments long-term payback, invested capital (ROIC), whose numerator (profits) denominator (invested capital) are adjusted for capitalized intangibles. Inferences based IRRs differ from those ARRs ROICs. show the sector now best-performing sector, its gap between cost has increased over time. unable separate contribution innovation tech’s high IRRs. JEL Classifications: D43; L1; M21; M41.
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ژورنال
عنوان ژورنال: The Accounting Review
سال: 2023
ISSN: ['1558-7967', '0001-4826']
DOI: https://doi.org/10.2308/tar-2021-0176