Stock Prices and Price/Earning Ratio Relationship: A Sectoral Analysis with Panel Data

Mehmet Nargelecekenler ()
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Mehmet Nargelecekenler: Uludag University

Business and Economics Research Journal, 2011, vol. 2, issue 2, 165

Abstract: In this study, we investigate with two different models that whether a meaningful relationship between price/earnings ratio and stock prices or not in the sectoral basis for the 2000-2008 period. We use one-way fixed effects models and test for low price/earnings ratio effect. According to the results, there is not relationship price/earnings ratio all sectors in ISE. Six months in certain sectors, certain sectors for the three-month period may be talking about such a relationship. Therefore, when we investing for relevance sector should be decided according to the model is valid. The estimated parameters show that there is low price/earnings ratio relationship is valid for all sectors, except the metal goods industry in a three-month period.

Keywords: Stock prices; Prices/earnings ratio; Panel data; Fixed effect; PCSE (search for similar items in EconPapers)
JEL-codes: C23 C33 D33 (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:ris:buecrj:0048

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