CAN MISPRICING OF ASSET GROWTH EXPLAIN THE ACCRUALS ANOMALY?

John Shon and Ping Zhou

The International Journal of Business and Finance Research, 2010, vol. 4, issue 1, 73-83

Abstract: Recent research suggests that the mispricing of asset growth can explain the accruals anomaly. We reexamine this issue by focusing on the role of accounting manipulations in stock mispricing. Specifically, we hypothesize that accounting manipulations are at the root of the accruals anomaly but play an insignificant role in the asset growth anomaly. Our large sample results strongly support our hypothesis, suggesting that investors can benefit from exploiting both anomalies instead of one.

Keywords: Accruals anomaly; growth anomaly; value-glamour; growth in long-term net operating assets (search for similar items in EconPapers)
JEL-codes: G10 M4 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (1)

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