Evolution of earnings-to-price ratios: International evidence

Cheol S. Eun and Jinsoo Lee

Global Finance Journal, 2010, vol. 21, issue 2, 125-137

Abstract: In this paper, we examine the pattern of historical evolution of international earnings-to-price ratios for a sample of 17 developed markets over the period 1980-2008. Using a measure of distance between earnings-to-price ratios of international stock markets, we find that earnings-to-price ratios of 17 markets have significantly converged toward each other during the sample period. Specifically, the average distance for our sample markets has decreased by about 70% during this period. Our analysis indicates that the convergence in earnings-to-price ratios reflects increasing capital market integration rather than more alignment in industrial structure among these markets.

Keywords: Earnings-to-price; ratio; Convergence; Capital; market; integration (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:glofin:v:21:y:2010:i:2:p:125-137

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