Profit margins, financing and investment in the Peruvian business sector (1998-2008)

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This paper develops a model and explains the determinants of profit margins in the Peruvian business sector in the 1998-2008 period. These are established in a fixed-price scenario, with reference to a set of variables such as the price elasticity of demand, the behaviour of possible industry entrants and any regulatory intervention by government. In addition, there is a direct relationship between profit margins and self-financing of investment. Profit margins and profit ratios in the business sector are rising and exceed international norms. The paper also identifies a trend towards lower levels of debt and leverage. It does not reject the hypothesis of linkage between profit margins and investment at the aggregate and sectoral level. The output-to-capital ratio or sales-to-assets ratio is directly linked to profit margins. Most investment is self-financed.
Translated title of the contributionMárgenes de ganancia, financiamiento e inversión del sector empresarial peruano (1998-2008)
Original languageEnglish
Pages (from-to)123-139
JournalCEPAL Review
Issue number105
StatePublished - Dec 2011


  • Business enterprises
  • Corporate debt
  • Corporate financing
  • Industrial enterprises
  • Investment
  • Peru
  • Profit
  • Statistical data


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