We document a positive investment premium in the Chinese market, in contrast to the typical negative investment premium in other markets. The premium only exists when we measure investment by quarterly asset growth, not annual asset growth. A positive premium can be attributed to the fact that quarterly asset growth positively predicts future profitability and GDP growth in the Chinese market, whereas both relationships are negative in the U.S. market. Furthermore, Chinese firms have shorter operating cycles compared to those in the U.S., which explains why quarter data is more valuable.

We document a positive investment premium in the Chinese market, in contrast to the typical negative investment premium in other markets. The premium only exists when we measure investment by quarterly asset growth, not annual asset growth. A positive premium can be attributed to the fact that quarterly asset growth positively predicts future profitability and GDP growth in the Chinese market, whereas both relationships are negative in the U.S. market. Furthermore, Chinese rms have shorter operating cycles compared to those in the U.S., which explains why quarter data is more valuable.

This study documents a pervasive inverse relationship between asset growth rates and bond performance among non-investment and low-investment grade bonds. We argue such inverse relation holds ex ante considering a high growth rate in firm total assets results in growth in tangible assets and lowers bond default probabilities. Our empirical finding supports this hypothesis. Tangible asset growth of poorly rated bonds is negatively associated with contemporaneous bond performance and expected default probability. The finding is robust to different economic conditions and investment sentiments.

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. We further examine the determinants of this asset growth effect across markets. The negative relation between asset growth and stock returns is weaker in markets where firms’ assets growth rates are more homogeneous, and in markets where firms rely more on internal financing and 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 the Asian markets.