Asset Growth and the Cross Section of Stock Returns: Evidence from Vietnam

Abstract

This article sheds light on the question of whether asset growth are a strong candidate for stock return prediction in emerging markets. We test for the firm level asset investment effects in stock return by examining the relationship between asset growth rates and subsequent stock returns. Using a large and unique data set of market and accounting variables of firms listed on Ho Chi Minh city stock exchange for the period from 2008 to 2012 and employing the method similar to Gray & Johnson (2011), our results indicate that asset growth has no significant effect on stock returns. Our results tend to support findings of Fama & French (2008) while contradict the results of Cooper et al. (2008) and Gray & Johnson (2011).