Dynamic behavior of value and growth stocks

The difference between the performance of growth and value portfolios presents an interesting puzzle for researchers in finance. Most studies showed that value stocks outperform growth stocks. This is the so-called value premium. In this article, we try to find an answer to the question as to why value stocks generate superior returns to growth stocks by dividing growth and value stocks into switching- and fixed-style stocks. We show that the difference in returns between value and growth stocks is caused by frequently rebalancing portfolios and find a value premium for the switching-style stocks and a growth premium for the fixed-style stocks. We will try to find an explanation for this phenomenon using the behavioral finance explanation that investors are unable to process information correctly. We use earnings announcement return data to test whether expectations of investors about future growth are too extreme.

PUBLIC CONSERVATION LAND AND EMPLOYMENT GROWTH IN THE NORTHERN FOREST REGION

As with many environmental issues, debates about increasing public conservation lands in the Northern Forest region frequently center on a perceived tradeoff between jobs and the environment. In particular, opponents of conservation lands often argue that employment will decline significantly when land is diverted from commodity-oriented uses such as wood products production. To evaluate this claim, we estimate a model of simultaneous employment and net migration growth using data on the 92 non-metropolitan counties comprising the region. Growth in employment and net migration are measured over the period 1990 to 1997 and the set of exogenous variables includes the 1990 share of the county land base in public conservation uses. We find that net migration rates were systematically higher in counties with more conservation lands, but the effects are relatively small. Public conservation lands were found to have no systematic effect on employment growth over the 1990 to 1997 period. Two extensions are considered. We examine the separate effects of preservationist and multiple-use lands. We also identify a "natural experiment" involving changes in national forest management that allows us to estimate the effects of diverting private forestland to public conservation uses. Our central conclusions are that existing public conservation lands have a positive, but small, effect on employment and migration in the Northern Forest region and that, over the range of our data, employment and migration are unlikely to be affected by timber harvest reductions resulting from the establishment of new conservation lands.Labor and Human Capital, Land Economics/Use,