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Value versus growth in PIIGS stock markets

Author

Listed:
  • Maria Teresa Medeiros Garcia
  • Ricardo António Abreu Oliveira

Abstract

Purpose - The purpose of this paper is to construct and evaluate value and growth portfolios in Portugal, Italy, Ireland, Greece and Spain, which are commonly known as the EU PIIGS, from 2003 to 2015. Previous research evidence suggests that stocks trading at a lower price relative to their fundamentals (value stocks) tend to outperform stocks that trade at higher prices (growth stocks) in the long run. Although this market anomaly has been studied immensely worldwide, especially for the US stock market, there is no clear evidence whether such an assertion is applicable in less-renowned countries. Design/methodology/approach - The paper utilises Fama and Macbeth (1973) regressions and its model extensions. Findings - This paper finds a significant value premium in these countries, which is compatible with previous studies conducted worldwide. Originality/value - To the best of the authors’ knowledge, this is the first attempt to examine this asset pricing anomaly in the PIIGS.

Suggested Citation

  • Maria Teresa Medeiros Garcia & Ricardo António Abreu Oliveira, 2018. "Value versus growth in PIIGS stock markets," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 45(5), pages 956-978, October.
    • Handle: RePEc:eme:jespps:jes-06-2017-0160
    DOI: 10.1108/JES-06-2017-0160
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    Citations

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    Cited by:

    1. Maria Elisabete Neves & Mário Abreu Pinto & Carla Manuela de Assunção Fernandes & Elisabete Fátima Simões Vieira, 2021. "Value and growth stock returns: international evidence (JES)," International Journal of Accounting & Information Management, Emerald Group Publishing Limited, vol. 29(5), pages 698-733, October.

    More about this item

    Keywords

    Asset pricing; Value premium; Fundamental ratios; M41; G10; G11; G12; G14;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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