Market Capitalization

Nusret Cakici and Kudret Topyan

Chapter Chapter 2 in Risk and Return in Asian Emerging Markets, 2014, pp 13-27 from Palgrave Macmillan

Abstract: Abstract As defined by Crain (2011), size effect1 in finance refers to the observation that smaller firms have higher returns than larger ones, on average, over long horizons. Banz (1981), for the first time, evaluated the relationship between the total market value of the common stock of a firm and its return and showed that for the period 1936–1975, the common stock of small firms had higher risk-adjusted returns than the common stock of large firms. It is thereafter considered that firm size might be a proxy for risk and, therefore, a potentially important return predictor. Smaller firms, in general, are much more risky compared to larger firms, leading to lower prices and higher returns.

Keywords: Market Capitalization; Stock Return; Small Firm; Large Firm; Capital Asset Price Model (search for similar items in EconPapers)
Date: 2014
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-137-35907-0_2

Ordering information: This item can be ordered from
http://www.palgrave.com/9781137359070

DOI: 10.1057/9781137359070_2

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().