NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Productivity Growth and Stock Returns: Firm- and Aggregate-Level Analyses

Hyunbae Chun, Jung-Wook Kim, Randall Morck

NBER Working Paper No. 19462
Issued in September 2013
NBER Program(s):   CF

Technological innovation is not a blessing for all firms, or for investors holding the market. In the late 20th century US, individual firms' stock returns correlate positively with their own productivity growth, yet the market return correlates negatively with aggregate productivity growth, yet. This seeming fallacy of composition reflects Schumpeterian creative destruction: a few technology winners' stocks rise with their rising productivity while many technology losers' stocks fall with their declining productivity. Thus, most individual firms' stock returns correlate negatively with aggregate productivity growth. Analogous reasoning explains prior findings that the market return correlates negatively with aggregate earnings.

download in pdf format
   (753 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w19462

Published: Hyunbae Chun & Jung-Wook Kim & Randall Morck, 2016. "Productivity growth and stock returns: firm- and aggregate-level analyses," Applied Economics, Taylor & Francis Journals, vol. 48(38), pages 3644-3664, August. citation courtesy of

Users who downloaded this paper also downloaded* these:
Morck, Yeung, and Yu w19017 R-squared and the Economy
Davis, Haltiwanger, Handley, Jarmin, Lerner, and Miranda w19458 Private Equity, Jobs, and Productivity
Jurado, Ludvigson, and Ng w19456 Measuring Uncertainty
Almeida, Campello, Cunha, and Weisbach w19502 Corporate Liquidity Management: A Conceptual Framework and Survey
Kogan, Papanikolaou, Seru, and Stoffman w17769 Technological Innovation, Resource Allocation, and Growth
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us