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The Performance of Growth Stocks and Value Stocks in the Pacific Basin

Author

Listed:
  • W. Scott Bauman

    (Department of Finance, Northern Illinois University, DeKalb, IL 60115-2854, USA)

  • C. Mitchell Conover

    (Department of Finance, University of Richmond, Richmond, VA 23173, USA)

  • Robert E. Miller

    (Department of Finance, Northern Illinois University, DeKalb, IL 60115-2854, USA)

Abstract

Many studies show that value stock strategies outperform growth stock strategies in U.S. markets and in international markets. However, the evidence is not clear as growth stocks have had higher returns in a few countries. Because the behavior of stock markets vary between different geographic regions, it is possible that the performance of these strategies may differ in the Pacific Rim region. We examine the performance of value stocks and growth stocks, defined on the basis of market price to book value per share, over the 10-year period 1986-1996, for six Pacific Rim countries. Based on over 11,900 annual stock returns, value stocks generally outperformed growth stocks over the 10-year period, and in the various Pacific Rim country stock markets. In addition, smaller cap stocks outperformed large cap stocks. Regardless of cap size, however, value stocks, on the whole, outperformed growth stocks. When growth stocks occasionally outperformed value stocks, the margin of difference tended to be small.

Suggested Citation

  • W. Scott Bauman & C. Mitchell Conover & Robert E. Miller, 2001. "The Performance of Growth Stocks and Value Stocks in the Pacific Basin," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 4(02), pages 95-108.
    • Handle: RePEc:wsi:rpbfmp:v:04:y:2001:i:02:n:s0219091501000358
    DOI: 10.1142/S0219091501000358
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    Citations

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    Cited by:

    1. Gengnan Chiang, 2016. "Exploring the transitional behavior among value and growth stocks," Review of Quantitative Finance and Accounting, Springer, vol. 47(3), pages 543-563, October.
    2. Klaus Grobys & Sami Vähämaa, 0. "Another look at value and momentum: volatility spillovers," Review of Quantitative Finance and Accounting, Springer, vol. 0, pages 1-21.
    3. Kai-Shi Chuang, 2018. "Glamour versus value, market timing and firm performance: evidence from mergers and acquisitions," Review of Quantitative Finance and Accounting, Springer, vol. 51(4), pages 967-1003, November.
    4. Klaus Grobys & Sami Vähämaa, 2020. "Another look at value and momentum: volatility spillovers," Review of Quantitative Finance and Accounting, Springer, vol. 55(4), pages 1459-1479, November.
    5. Spyros I. Spyrou, 2020. "Valuation ratio style investing and economic sentiment: evidence from major Eurozone markets," Review of Quantitative Finance and Accounting, Springer, vol. 55(3), pages 827-856, October.
    6. Yen, Jenn Yaw & Sun, Qian & Yan, Yuxing, 2004. "Value versus growth stocks in Singapore," Journal of Multinational Financial Management, Elsevier, vol. 14(1), pages 19-34, February.

    More about this item

    Keywords

    Growth vs. Value; Price-to-Book; Small Cap vs. Large Cap;
    All these keywords.

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • G2 - Financial Economics - - Financial Institutions and Services
    • G3 - Financial Economics - - Corporate Finance and Governance

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