Dissecting the Asset Growth Anomaly

• Main Author: FU, Fangjian
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2014
• Subjects: Cross-Sectional Stock Returns; Asset Growth; Delisting Bias; External Financing; Business; Finance and Financial Management
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/4494; https://ink.library.smu.edu.sg/context/lkcsb_research/article/5493/viewcontent/Fangjianfu.pdf
• Institution: Singapore Management University

Studies have shown that firm asset growth predicts cross-sectional stock returns. Firms that shrink their assets earn superior returns while firms that substantially expand their assets incur poor returns in the following years. I show that the negative asset growth often implies poor operating perf...