Rationalizing the value premium in emerging markets

M.S. Ebrahim; S. Girma; M.E. Shah; J.M. Williams

doi:10.1016/j.intfin.2013.11.005

Rationalizing the value premium in emerging markets

M.S. Ebrahim
, S. Girma
, M.E. Shah
, J.M. Williams

Ysgol Busnes Albert Gubay

Allbwn ymchwil: Cyfraniad at gyfnodolyn › Erthygl › adolygiad gan gymheiriaid

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We reconfirm the presence of value premium in emerging markets. Using the Brazil–Turkey–India–China (BTIC) grouping during a period of substantial economic growth and stock market development, we attribute the premium to the investment patterns of glamour firms. We conjecture based on empirical evidence that glamour firms hoard cash, which delays undertaking of growth options, especially in poor economic conditions. Whilst this helps to mitigate business risk, it lowers market valuations and drives down expected returns. Our evidence supports arguments that the value premium is explained by economic fundamentals rather than a risk factor that is common to all firms

Iaith wreiddiol	Saesneg
Tudalennau (o-i)	51-70
Cyfnodolyn	Journal of International Financial Markets, Institutions and Money
Cyfrol	29
Dyddiad ar-lein cynnar	1 Rhag 2013
Dynodwyr Gwrthrych Digidol (DOIs)	https://doi.org/10.1016/j.intfin.2013.11.005
Statws	Cyhoeddwyd - Maw 2014

NDC y CU

Mae’r allbwn hwn yn cyfrannu at y Nod(au) Datblygu Cynaliadwy canlynol

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10.1016/j.intfin.2013.11.005

Dyfynnu hyn

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title = "Rationalizing the value premium in emerging markets",

abstract = "We reconfirm the presence of value premium in emerging markets. Using the Brazil–Turkey–India–China (BTIC) grouping during a period of substantial economic growth and stock market development, we attribute the premium to the investment patterns of glamour firms. We conjecture based on empirical evidence that glamour firms hoard cash, which delays undertaking of growth options, especially in poor economic conditions. Whilst this helps to mitigate business risk, it lowers market valuations and drives down expected returns. Our evidence supports arguments that the value premium is explained by economic fundamentals rather than a risk factor that is common to all firms",

author = "M.S. Ebrahim and S. Girma and M.E. Shah and J.M. Williams",

year = "2014",

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doi = "10.1016/j.intfin.2013.11.005",

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journal = "Journal of International Financial Markets, Institutions and Money",

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T1 - Rationalizing the value premium in emerging markets

AU - Ebrahim, M.S.

AU - Girma, S.

AU - Shah, M.E.

AU - Williams, J.M.

PY - 2014/3

Y1 - 2014/3

N2 - We reconfirm the presence of value premium in emerging markets. Using the Brazil–Turkey–India–China (BTIC) grouping during a period of substantial economic growth and stock market development, we attribute the premium to the investment patterns of glamour firms. We conjecture based on empirical evidence that glamour firms hoard cash, which delays undertaking of growth options, especially in poor economic conditions. Whilst this helps to mitigate business risk, it lowers market valuations and drives down expected returns. Our evidence supports arguments that the value premium is explained by economic fundamentals rather than a risk factor that is common to all firms

AB - We reconfirm the presence of value premium in emerging markets. Using the Brazil–Turkey–India–China (BTIC) grouping during a period of substantial economic growth and stock market development, we attribute the premium to the investment patterns of glamour firms. We conjecture based on empirical evidence that glamour firms hoard cash, which delays undertaking of growth options, especially in poor economic conditions. Whilst this helps to mitigate business risk, it lowers market valuations and drives down expected returns. Our evidence supports arguments that the value premium is explained by economic fundamentals rather than a risk factor that is common to all firms

U2 - 10.1016/j.intfin.2013.11.005

DO - 10.1016/j.intfin.2013.11.005

M3 - Article

SN - 1042-4431

VL - 29

SP - 51

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JO - Journal of International Financial Markets, Institutions and Money

JF - Journal of International Financial Markets, Institutions and Money

ER -

Rationalizing the value premium in emerging markets

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