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Industry Leader Premium

Author

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  • Ja Ryong Kim

    (PhD, University of Nottingham, UK)

Abstract

The advantage of becoming an industry leader is widely studied. However, how can we measure it? This paper measures how much premium an industry leader has in its valuation through a P/E ratio. The findings suggest industry leaders have significantly higher P/E ratios by 0.65 than their peers. The analysis of earnings forecasts suggests this is not due to their high earnings growth potentials but from other sources. However, in stock recommendations, the premium is not recognised by analysts but interpreted as the sign of over-valuation. The paper contributes the new structure of a P/E ratio by identifying the industry leader premium.

Suggested Citation

  • Ja Ryong Kim, 2019. "Industry Leader Premium," European Journal of Multidisciplinary Studies Articles, Revistia Research and Publishing, vol. 4, May - Aug.
    • Handle: RePEc:eur:ejmsjr:467
    DOI: 10.26417/ejms-2019.v4i2-542
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    References listed on IDEAS

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    1. Bart Voorn & Marieke L. van Genugten & Sandra van Thiel, 2017. "The efficiency and effectiveness of municipally owned corporations: a systematic review," Local Government Studies, Taylor & Francis Journals, vol. 43(5), pages 820-841, September.
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    Cited by:

    1. Tomasz Jedynak & Krzysztof Wąsowicz, 2021. "The Relationship between Efficiency and Quality of Municipally Owned Corporations: Evidence from Local Public Transport and Waste Management in Poland," Sustainability, MDPI, vol. 13(17), pages 1-30, August.
    2. Jabłoński Marek, 2019. "Interdependence Among Creativity, Education, and Job Experience: A Municipal Company in Poland," Journal of Management and Business Administration. Central Europe, Sciendo, vol. 27(4), pages 48-70, December.

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