Value or Growth Strategy? Empirical Evidence in Brazil
Vol. 15 No. 46 (2013), Articles
Vol. 15 No. 46 (2013)

Value or Growth Strategy? Empirical Evidence in Brazil

Articles
https://doi.org/10.7819/rbgn.v15i46.1170
Published 2013-04-15
Rebeca Albuquerque Cordeiro
Universidade Federal da Paraíba - UFPB
Márcio André Veras Machado
Universidade Federal da Paraíba - UFPB
PDF
PDF (Português (Brasil))

Keywords

Value-growth effect. Stocks. Investment strategies.

How to Cite

Cordeiro, R. A., & Machado, M. A. V. (2013). Value or Growth Strategy? Empirical Evidence in Brazil. Review of Business Management, 15(46), 91–111. https://doi.org/10.7819/rbgn.v15i46.1170
ACM ACS APA ABNT Chicago Harvard IEEE MLA Turabian Vancouver

Download Citation

Endnote/Zotero/Mendeley (RIS) BibTeX

Abstract

This article aimed at verifying the existence of the value-growth effect and at identifying the variables that best explain their impact on Brazilian stock returns. To this end, we tested book-to-market, profit/price and cash flow/price variables. Two methodological approaches were employed: portfolio analysis, in which portfolios were formed according to each variable of interest; and regression analysis with panel data, based on individual assets. The sample was made up of companies with shares traded in BM&FBovespa during the 1995-2008 period. According to results found, growth stocks presented higher returns than value stocks. Thus, we may conclude that the well-documented value-growth effect is not valid in Brazil, since empirical evidence supported growth strategies. Due to the long research period, results may signal prevalence of growth strategy in the long term. Furthermore, the high volatility of emerging countries’ capital markets was emphasized, as pointed out by Fama and French (1998). Moreover, to establish investment strategies that allow for greater returns, it was found that the variable that best identifies growth stocks is the book-to-market ratio.

https://doi.org/10.7819/rbgn.v15i46.1170
PDF
PDF (Português (Brasil))

If a paper is approved for publication, its copyright has to be transferred by the author(s) to the Review of Business Management – RBGN.

Accordingly, authors are REQUIRED to send RBGN a duly completed and signed Copyright Transfer Form. Please refer to the following template: [Copyright Transfer]

The conditions set out by the Copyright Transfer Form state that the Review of Business Management – RBGN owns, free of charge and permanently, the copyright of the papers it publishes. Although the authors are required to sign the Copyright Transfer Form, RBGN allows authors to hold and use their own copyright without restrictions.

The texts published by RBGN are the sole responsibility of their authors.

The review has adopted the CC-BY Creative Commons Attribution 4.0 allowing redistribution and reuse of papers on condition that the authorship is properly credited.