Value versus Growth: Movements in Economic Fundamentals
نویسندگان
چکیده
We study the cyclical behavior of economic fundamentals for value and growth firms. Our goal is to evaluate the empirical relevance of recent rational theories of the value premium. We find that the fundamentals of value firms are more adversely affected by negative business cycle shocks than those of growth firms. And the differential response is mostly significant. We also examine the potential sources of the cyclical movements. Jesse H. Jones Graduate School of Management, Rice University, Houston TX 77005; tel: (713)348-4167; fax: (713)348-5251; email: [email protected]. William E. Simon Graduate School of Business Administration, University of Rochester, Rochester NY 14627; tel: (585)275-3491; fax: (585)273-1140; email: [email protected]. We thank Evan Dudley for helpful comments.
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