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Value Stocks and Growth Stocks: A Study of the Italian Market

Author

Listed:
  • Federico Gagliolo

    (Department of Economics, University of Genoa, Via Vivaldi 5, Genoa, Italy.)

  • Gabriele Cardullo

    (Department of Economics, University of Genoa, Via Vivaldi 5, Genoa, Italy.)

Abstract

This article focuses on the study of value and growth stocks in the Italian market during the period 2001-2018, trying to understand if there is a difference in terms of return between the two share classes and which could be the explanation. The analysis reveals a persistent and large value premium in the early 2000s, while after the financial crisis the premium diminished considerably. The excess return provided by value stocks was marked and persistent only in case of smaller firms, while in case of large-cap stocks the phenomenon was limited and present only in the early years of the 21st century. Finally, the analysis suggests that value stocks are not particularly riskier than growth stocks. Therefore, it seems that, at least in part, the value premium in the Italian market may present a mispricing explanation.

Suggested Citation

  • Federico Gagliolo & Gabriele Cardullo, 2020. "Value Stocks and Growth Stocks: A Study of the Italian Market," International Journal of Economics and Financial Issues, Econjournals, vol. 10(3), pages 7-15.
    • Handle: RePEc:eco:journ1:2020-03-2
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    References listed on IDEAS

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    Cited by:

    1. Bevanda Lea-Marija & Zaimović Azra & Arnaut-Berilo Almira, 2021. "Performance of Value and Growth Stocks in the Aftermath of the Global Financial Crisis," Business Systems Research, Sciendo, vol. 12(2), pages 268-283, December.

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    More about this item

    Keywords

    Value premium; stock return; systematic risk.;
    All these keywords.

    JEL classification:

    • 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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