Value and Growth Investing: Review and Update
Year: 2004
Type: article
Abstract: A great deal of academic empirical research has been published on value and growth investing. We review and update this literature, discuss the various explanations for the performance of value versus growth stocks, review the empirical research on the alternative explanations, and provide some new results based on an updated and expanded sample. The evidence suggests that, even after taking into account the experience of the late 1990s, value investing generates superior returns. Common measures of risk do not support the argument that the return differential is a result of the higher riskiness of value stocks. Instead, behavioral considerations and the agency costs of delegated investment management lie at the root of the value–growth spread.
Source: Financial Analysts Journal
Authors: Louis K.C. Chan, Josef Lakonishok
Institution: University of Illinois Urbana-Champaign
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2137463153