Abstract
We investigate the value-growth premium puzzle by merging insights from urban economics and finance that relate firm location to its stock performance. The value-growth premium in locations with high historical house price appreciation is 3.6% per year larger than the premium in areas that experienced little house price appreciation. The results support investment-based models explaining the value premium; moreover, we find the house price channel reduces returns of growth firms rather than increasing returns of value firms. House price appreciation remains significant after controlling for common explanations of the premium.
| Original language | English (US) |
|---|---|
| Article number | 101690 |
| Journal | Journal of Empirical Finance |
| Volume | 87 |
| DOIs | |
| State | Published - Jun 2026 |
All Science Journal Classification (ASJC) codes
- Finance
- Economics and Econometrics
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