Do Cash Flows of Growth Stocks Really Grow Faster?

60 Pages Posted: 3 Aug 2011 Last revised: 13 Nov 2016

See all articles by Huafeng (Jason) Chen

Huafeng (Jason) Chen

Fudan University - Fanhai International School of Finance (FISF)

Date Written: November 10, 2016

Abstract

Contrary to conventional wisdom, growth stocks (low book-to-market stocks) do not have substantially higher future cash-flow growth rates than value stocks, in both rebalanced and buy-and-hold portfolios. The efficiency growth, survivorship and look-back biases, and rebalancing effect help explain the results. This finding suggests that duration alone is unlikely to explain the value premium.

The Internet Appendix for this paper may be found at http://ssrn.com/abstract=2868277.

JEL Classification: G12

Suggested Citation

Chen, Huafeng (Jason), Do Cash Flows of Growth Stocks Really Grow Faster? (November 10, 2016). Journal of Finance, Forthcoming, Available at SSRN: https://ssrn.com/abstract=1903904 or http://dx.doi.org/10.2139/ssrn.1903904

Huafeng (Jason) Chen (Contact Author)

Fudan University - Fanhai International School of Finance (FISF) ( email )

220 Handan Road
Shanghai, 200433
China

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
1,137
Abstract Views
4,194
rank
24,083
PlumX Metrics