Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/337268 
Year of Publication: 
2023
Citation: 
[Journal:] Journal of Derivatives and Quantitative Studies: Seonmul yeon'gu (JDQS) [ISSN:] 2713-6647 [Volume:] 31 [Issue:] 4 [Year:] 2023 [Pages:] 278-308
Publisher: 
Emerald, Leeds
Abstract: 
National cultures significantly explain cross-country differences in the relation between asset growth and stock returns. Motivated by the notion that managers in individualistic and low uncertainty-avoiding cultures have a higher tendency to overinvest, this study aims to show that the negative relation between asset growth and stock returns is stronger in countries with such cultural features. Once the researchers control for cultural dimensions, proxies associated with the q-theory, limits-to-arbitrage, corporate governance, investor protection and accounting quality provide no incremental power for the relation between asset growth and stock returns across countries. Evidence of this study highlights the importance of the overinvestment hypothesis in explaining the asset growth anomaly around the world.
Subjects: 
Asset growth
Individualism
International equity markets
Overinvestment
Uncertainty avoidance
JEL: 
G12
G14
G15
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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