Abstract
Tests using the Capital Asset Pricing Model show that during the 1981 through 1983 period, a portfolio of common stocks composed of owner-controlled firms significantly outperformed a group of manager-controlled firms, even after adjusting for systematic risk. Small capitalization stocks were also shown to have generated large abnormal returns compared to large firm stock during this period. Interestingly, the statistical significance of both the ownership control and small firm effects was not reduced when the other effect was controller. The implications of these results for investors are that large excess returns may be earned by tilting stock portfolios towards owner-controlled, small capitalization firms.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
