Overreaction to growth opportunities: An explanation of the asset growth anomaly



Cai, Charlie X, Li, Peng and Zhang, Qi
(2018) Overreaction to growth opportunities: An explanation of the asset growth anomaly. European Financial Management, 25 (4). 747 - 776.

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Abstract

The negative relation between asset growth and subsequent stock returns is known as the asset growth anomaly. We propose that overreaction to growth opportunities is the source of the asset growth anomaly. This suggests that growth firms as opposed to mature firms, and firms with longer series of asset growth should experience a stronger asset growth anomaly. Our evidence supports these predictions.

Item Type: Article
Depositing User: Symplectic Admin
Date Deposited: 04 Jul 2018 08:59
Last Modified: 31 Jul 2022 07:13
DOI: 10.1111/eufm.12188
Related URLs:
URI: https://livrepository.liverpool.ac.uk/id/eprint/3023341