Description:
A compelling debate exists that Bowman’s paradox is an empirical artifact. We provide a novel approach to untangle this debate by triangulating the risk-return relationship using different risk-return proxies and econometric models in Asian emerging countries. The risk-return relationship estimated on firm accounting-based ratios or its combination with market-based measures supports Bowman’s paradox. Whereas, the market-based risk-return relationship upholds the financial-theory point of view. However, the results are mixed when risk is subdivided into systematic and business risk. Our results are robust across standard deviation and semi-standard deviation-based measures of risk and there is no sign of a non-linear relationship