Asset growth and stock returns: Evidence from Asian financial markets

Authors

Tong Yao, Henry B. Tippie College of Business
Tong Yu, University of Rhode Island
Ting Zhang, University of Dayton
Shaw Chen, University of Rhode Island

Document Type

Article

Date of Original Version

1-1-2011

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. © 2010.

Publication Title, e.g., Journal

Pacific Basin Finance Journal

Volume

19

Issue

1

Citation/Publisher Attribution

Yao, Tong, Tong Yu, Ting Zhang, and Shaw Chen. "Asset growth and stock returns: Evidence from Asian financial markets." Pacific Basin Finance Journal 19, 1 (2011): 115-139. doi: 10.1016/j.pacfin.2010.09.004.