How Can We Measure Stock Market Returns? An International Comparison

  •  Ben Hatem    


The aim of our empirical work is to identify how we can measure stock returns. Stocks returns are approximated by market share price growth rate. We use two measures of stocks returns; return on assets, ROA, and return on equity, ROE. As a control variable, we use firm age. Our samples consists of 186 firms from the United Kingdom and 186 firms from the Ukraine studied over a period of 4 years from 2007 to 2010. To this end, we estimate three models. Using the data panels methodology, we could not however find evidence on a significant association between profitability measured by, return on assets and return on equity, and stock returns for Ukraine. However, we conclude a positive effect of ROA and stocks return, and a negative effect of ROE and stocks return for the United King Dom.

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