Document Type

Journal Article


Australia has historical time series for a wide range of economic data covering most of the twentieth century. These include statistical information relating to national income, demography, prices, external trade, financial markets, and the government sector. However, we lack along time series for business profits. We have calculations for some industries, especially banking, and national figures from 1985 using the IBIS database.

We offer a business profits time series to fill this lacuna. Constructing such a time series establishes the building blocks for addressing arange of investigative questions. To begin with, the returns to entrepreneurship and to shareholder risk, the equity premium, can be estimated by a comparison of a profits series with existing data on interest rates. Comparative business performance can be measured by analysing a national series with estimates from individual firms. On a national level, our results will enable scholars to compare cyclical and secular trends in business activity with other time series (for example, with national income to estimate business’s share of national wealth). Our understanding of Australia’s economic development in the twentieth century has been enriched by analyses that place it in a comparative context. Comparing a profitability series with those compiled for other countries will add to international benchmarks of Australian economic performance (Arnold 1999; Cassis1997; Cassis and Brautaset 2003; Marseille1995; Spoerer 1996; Tafunell 2000; Tafunelland Carreras 2003). In addition, it will throw light upon the relationship, if any, between comparative profitability and inflows of foreign direct investment, which has been a key feature of Australian experience.