TESTING FOR PROFIT PERSISTENCE OF LISTED MANUFACTURING COMPANIES IN ISTANBUL STOCK EXCHANGE

In this paper, using the return on assets (ROA) and return on equity (ROE) ratios of the manufacturing companies listed on ISE (Istanbul Stock Exchange), it has been analysed whether the profits of those companies are persistent or not, with the usage of Hadri-Kurozumi (2012) panel unit root test. In the paper focusing on the period between 2007-Q1 and 2013-Q4, the fact that the panels have a heterogeneous structure is determined by Pesaran and Yamagata (2008) Slope Homogeneity Test. The existence of cross-sectional dependency is tested with CDLMadj test developed by Pesaran et al. (2008). As a result of the paper, it is determined that the profit is persistent in sectors that operate in manufacturing areas such as paper, packaging, printing, and rock, soil, cement. On the other hand, it has been found that the profit is not persistent for the chemistry, petroleum, plastic, metal machines, main metal and textile sectors