Rationalizing the value premium in emerging markets

Research output: Contribution to journalArticle

Standard Standard

Rationalizing the value premium in emerging markets. / Ebrahim, M.S.; Girma, S.; Shah, M.E.; Williams, J.M.

In: Journal of International Financial Markets, Institutions and Money, Vol. 29, 03.2014, p. 51-70.

Research output: Contribution to journalArticle

HarvardHarvard

Ebrahim, MS, Girma, S, Shah, ME & Williams, JM 2014, 'Rationalizing the value premium in emerging markets', Journal of International Financial Markets, Institutions and Money, vol. 29, pp. 51-70. https://doi.org/10.1016/j.intfin.2013.11.005

APA

Ebrahim, M. S., Girma, S., Shah, M. E., & Williams, J. M. (2014). Rationalizing the value premium in emerging markets. Journal of International Financial Markets, Institutions and Money, 29, 51-70. https://doi.org/10.1016/j.intfin.2013.11.005

CBE

Ebrahim MS, Girma S, Shah ME, Williams JM. 2014. Rationalizing the value premium in emerging markets. Journal of International Financial Markets, Institutions and Money. 29:51-70. https://doi.org/10.1016/j.intfin.2013.11.005

MLA

Ebrahim, M.S. et al. "Rationalizing the value premium in emerging markets". Journal of International Financial Markets, Institutions and Money. 2014, 29. 51-70. https://doi.org/10.1016/j.intfin.2013.11.005

VancouverVancouver

Ebrahim MS, Girma S, Shah ME, Williams JM. Rationalizing the value premium in emerging markets. Journal of International Financial Markets, Institutions and Money. 2014 Mar;29:51-70. https://doi.org/10.1016/j.intfin.2013.11.005

Author

Ebrahim, M.S. ; Girma, S. ; Shah, M.E. ; Williams, J.M. / Rationalizing the value premium in emerging markets. In: Journal of International Financial Markets, Institutions and Money. 2014 ; Vol. 29. pp. 51-70.

RIS

TY - JOUR

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

VL - 29

SP - 51

EP - 70

JO - Journal of International Financial Markets, Institutions and Money

JF - Journal of International Financial Markets, Institutions and Money

SN - 1042-4431

ER -