TY - JOUR
T1 - Productivity and equity market fundamentals
T2 - 80 years of evidence for 11 OECD countries
AU - Madsen, Jakob B.
AU - Davis, E. Philip
PY - 2008/12/1
Y1 - 2008/12/1
N2 - The share market boom in the 1990s is often linked to the acceleration in labour and total factor productivities over the same period. This paper explores the argument that labour and total factor productivities are inaccurate measures of firm's earnings, which underlie equity valuations, and that capital productivity is a better measure of earnings. Using 80 years of data for 11 OECD countries, it is shown empirically that the link of capital productivity to share returns is indeed stronger than that of labour productivity and TFP.
AB - The share market boom in the 1990s is often linked to the acceleration in labour and total factor productivities over the same period. This paper explores the argument that labour and total factor productivities are inaccurate measures of firm's earnings, which underlie equity valuations, and that capital productivity is a better measure of earnings. Using 80 years of data for 11 OECD countries, it is shown empirically that the link of capital productivity to share returns is indeed stronger than that of labour productivity and TFP.
KW - Productivity
KW - Share returns
UR - http://www.scopus.com/inward/record.url?scp=54849429118&partnerID=8YFLogxK
U2 - 10.1016/j.jimonfin.2008.05.008
DO - 10.1016/j.jimonfin.2008.05.008
M3 - Article
AN - SCOPUS:54849429118
VL - 27
SP - 1261
EP - 1283
JO - Journal of International Money and Finance
JF - Journal of International Money and Finance
SN - 0261-5606
IS - 8
ER -