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.
| Original language | English |
|---|---|
| Pages (from-to) | 747-776 |
| Journal | European Financial Management |
| Volume | 25 |
| Issue number | 4 |
| DOIs | |
| Publication status | Published - Sept 2019 |