We examine whether the application of the asset impairment model spurs monitoring activities and investment decisions for long-term growth. For identification, we use the regression kink design (RKD) and focus on a narrow window around a point at which a firm’s book-to-market ratio of assets (BTM) equals 1. We first show that the sensitivity of asset impairments to the BTM ratio substantially increases when the BTM ratio exceeds 1, identifying the kink point where the application of the asset impairment model is triggered. We then test whether monitoring and investment activities change around the kink point. We find an increase in shareholder voting against management and an increased likelihood of forced CEO turnover around the kink point. We also find increased R&D investments but decreased over-investments in capital expenditures and acquisitions around the kink point. Further analyses reveal that patent filings and patent values increase at the kink point.