Market share growth and stock returns

Jaideep Chowdhury; Gokhan Sonaer; Umut Celiker

doi:10.1111/acfi.12300

Market share growth and stock returns

Jaideep Chowdhury
, Gokhan Sonaer
, Umut Celiker

James Madison University
Duquesne University

Research output: Contribution to journal › Article › peer-review

5 Scopus citations

Abstract

We find a negative relationship between market share growth and subsequent stock returns, three- and four-factor alphas. We report the potential explanatory role of market share growth in explaining subsequent average monthly stock returns. High (Low) market share growth firms report good (poor) operating performance and positive (negative) SUEs in the quarter in which market share growth is measured and investors overact to that good (bad) news. However, high (low) market share growth firms experience decrease (increase) in operating performance and SUEs in the subsequent quarters resulting in corrections in investors’ expectations and subsequent lower (higher) stock returns.

Original language	English
Pages (from-to)	97-129
Number of pages	33
Journal	Accounting and Finance
Volume	58
DOIs	https://doi.org/10.1111/acfi.12300
State	Published - Nov 1 2018

Keywords

Market anomalies
Market share growth
Stock market returns

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10.1111/acfi.12300

Cite this

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AB - We find a negative relationship between market share growth and subsequent stock returns, three- and four-factor alphas. We report the potential explanatory role of market share growth in explaining subsequent average monthly stock returns. High (Low) market share growth firms report good (poor) operating performance and positive (negative) SUEs in the quarter in which market share growth is measured and investors overact to that good (bad) news. However, high (low) market share growth firms experience decrease (increase) in operating performance and SUEs in the subsequent quarters resulting in corrections in investors’ expectations and subsequent lower (higher) stock returns.

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Market share growth and stock returns

Abstract

Keywords

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