An econometric analysis of convergence of profits on BİST basic metal sector

Businesses are economic units established not only to produce goods and/or services to meet the needs of people, but also to provide sustainable profitability to their owners and social benefit to society. In the long run, businesses should consider many factors such as growth, providing goods and social responsibility. The main purpose of the businesses in the long term is to survive in a profitable way, to realize sustainable growth and as a result of all these, to maximize their market value. In this context, it is a necessity for businesses to make profit, to continue their activities without interruption and to reach their growth targets in the long term. To gain competitive advantage, businesses should aim to increase their market share and increase their profit share. Besides, they need to consider determining factors such as benefit, target market and competition. This stusy aims to determine whether the return on assets of companies in the Main Metal Industry sector in Borsa İstanbul are convergent. Thorough this aim, stochastic convergence method is used to test the convergence of the return on assets of the Main Metal Industry companies to the sector averages. The periods of the series for 2000:Q1-2020:Q4 are analyzed. Unit root tests are used to test the convergence of these series. Augmented Dickey-Fuller (ADF), Phillips-Perron (PP), and Zivot and Andrews unit root tests are used in this study to analyze the stationarity levels of the series. It is determined that the ROA series of businesses are stable as a result of the unit root analyses and it is possible to say that convergence exists according to this result. In this context, it is seen that there exists a fierce competition among businesses, and as a result, it has become a necessity for businesses to consider many factors in order to achieve sustainable profits in a competitive environment.