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Market share growth and stock returns

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  • Jaideep Chowdhury
  • Gokhan Sonaer
  • Umut Celiker

Abstract

We find a negative relationship between market share growth and subsequent stock returns, three‐ and four‐factor alphas. We report the potential explanatory role of market share growth in explaining subsequent average monthly stock returns. High (Low) market share growth firms report good (poor) operating performance and positive (negative) SUEs in the quarter in which market share growth is measured and investors overact to that good (bad) news. However, high (low) market share growth firms experience decrease (increase) in operating performance and SUEs in the subsequent quarters resulting in corrections in investors’ expectations and subsequent lower (higher) stock returns.

Suggested Citation

  • Jaideep Chowdhury & Gokhan Sonaer & Umut Celiker, 2018. "Market share growth and stock returns," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 58(S1), pages 97-129, November.
    • Handle: RePEc:bla:acctfi:v:58:y:2018:i:s1:p:97-129
    DOI: 10.1111/acfi.12300
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    References listed on IDEAS

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    Cited by:

    1. Benjamin A. Jansen, 2021. "Cash flow growth and stock returns," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 44(2), pages 371-402, June.

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