On September 29, the Northern Finance Association awarded Sauder Assistant Professor Jason Chen their Chartered Business Valuators Award for the Best Paper on Business Valuation.
The Northern Finance Association, which consists of finance academics from Canada and around the world, organizes a forum every fall where finance academics, PhD students and professionals present and discuss the latest research in the field.
In his paper, “Do Cash Flows of Growth Stocks Really Grow Faster?”, Assistant Professor Chen questions a commonly held belief that growth stocks have substantially higher cash-flow growth rate compared to value stocks. Chen’s research shows this assumption is not actually supported by data and that often, the opposite case is true.
Academics tend to think that growth stock is related to high prices, says Chen, while practitioners often believe that the growth stocks’ cash flows are expected to grow faster in the future. But “the results suggest that the two notions of growth stocks are not the same,” he says.
The renowned National Bureau for Economic Research chose to present Chen’s paper during their Summer Institute Asset Pricing Workshop in July and the paper was also featured during the Western Finance Association Meeting and the Duke/UNC asset pricing conference.
“I’ve always found my research interesting and this award tells me that other people found it interesting too,” says Chen. “It feels great when that happens.”