Competition and Distribution of Profit Rates in Colombia: A Marxist Political Economy Analysis.

Duque Garcia, Carlos Alberto

The firm-level rate of profit and the average rates of profit by industry play a central role in the study of intra-and-inter industry real competition. There has been a relatively lack of empirical research about competition and distribution of profit rates, especially for peripheral countries. This article estimates the distribution of profit rates among and within industries in Colombia and interprets those results in light of the Marxist economic theory. The econometrical methodology relies on non-parametric techniques (kernel density estimations) employing firm-level data from the 4963 biggest firms in the country in 2018. The main results are: first, a significant dispersion in the firm-level profit rates as well as in the average profit rates across industries; second, a non-normal uni-modal tent-shape distribution for the general firm-level rates of profit as well as for the distribution of profit rates in the majority of industries; third, negative profit rates as a structural feature of profit rate distribution at both: general and sectoral levels; fourth, in comparison with interest rates, the firms exhibit low profitability: 60.5% of the firms yielded profit rates below the average deposit interest rate. Grosso modo, those findings are congruent with Marxist economic theory but not with other economic paradigms.

PROBABILITY density function; MARXIAN economics; MARXIST philosophy; INTEREST rates; PROFITABILITY

International Critical Thought, 2024, Vol 14, Issue 4, p631

2159-8282

Academic Journal

10.1080/21598282.2024.2432129