Reexamining Growth Effects: Are All Types of Asset Growth the Same?

• 成果类型: Article
• 署名作者: Cao, Sean Shun
• 署名单位: University System of Georgia; Georgia State University
• 刊物名称: CONTEMPORARY ACCOUNTING RESEARCH
• ISSN/ISSBN: 0823-9150
• DOI: 10.1111/1911-3846.12209
• 发表日期: 2016
• 页码: 1518-1548
• 关键词: EARNINGS-ANNOUNCEMENT DRIFT; Trade credit; cross-section; STOCK; management; performance; INVESTMENT; accruals; returns; persistence

摘要

Asset growth has been shown to be negatively associated with future returns. Cooper, Gulen, and Schill (2008) argue that an aggregation of all asset growth components as total asset (TA) growth leads to the strongest association with future negative returns. Based on their study, the literature now employs TA growth as an umbrella proxy for the growth effect. I hypothesize that not all types of growth imply negative future returns. Specifically, I show that growth financed by suppliers is positively associated with future performance and returns. Removing this growth component from TA growth makes it evident that the TA growth anomaly is simply a noisy manifestation of the net operating asset growth anomaly. Consequently, I suggest caution when using TA growth to control for the growth effect.