Asset growth and stock returns: Evidence from Asian financial markets

Tong Yao, Tong Yu, Ting Zhang and Shaw Chen

Pacific-Basin Finance Journal, 2011, vol. 19, issue 1, 115-139

Abstract: This study examines the effect of corporate asset growth on stock returns using data on nine equity markets in Asia. For the period from 1981 to 2007, we find a pervasive negative relation between asset growth and subsequent stock returns. Such relation is weaker in markets where firms' asset growth rates are more homogeneous and persistent and in markets where firms rely more on bank financing for growth. On the other hand, corporate governance, investor protection, and legal origin do not influence the magnitude of the asset growth effect in Asian markets.

Keywords: Asset; growth; Asian; financial; markets; Return; predictability; Market; efficiency (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (21)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:19:y:2011:i:1:p:115-139

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