File Download
There are no files associated with this item.
Links for fulltext
(May Require Subscription)
- Publisher Website: 10.1016/j.finmar.2020.100561
- Scopus: eid_2-s2.0-85083856558
- WOS: WOS:000618640300007
- Find via
Supplementary
- Citations:
- Appears in Collections:
Article: The invisible burden
Title | The invisible burden |
---|---|
Authors | |
Keywords | Goodwill Return predictability Cash flows Underreaction Market inefficiency |
Issue Date | 2021 |
Publisher | Elsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/finmar |
Citation | Journal of Financial Markets, 2021, v. 52, article no. 100561 How to Cite? |
Abstract | We study the role of goodwill, an important form of intangible assets arising from merger and acquisitions (M&As), on asset pricing. We find that goodwill-to-sales strongly and negatively predicts the cross-section of U.S. stock returns, especially among firms with cross-industry M&As and firms with overconfident CEOs. It remains an economically and statistically significant predictor of stock returns after adjustment for common factors. Our results suggest that goodwill-to-sales subsumes information on firm value, and stock markets underreact to this information because the fair value of goodwill is unobservable and hard to evaluate. |
Persistent Identifier | http://hdl.handle.net/10722/282482 |
ISSN | 2023 Impact Factor: 2.1 2023 SCImago Journal Rankings: 1.101 |
ISI Accession Number ID |
DC Field | Value | Language |
---|---|---|
dc.contributor.author | Liu, X | - |
dc.contributor.author | Yin, C | - |
dc.contributor.author | ZHENG, W | - |
dc.date.accessioned | 2020-05-15T05:28:41Z | - |
dc.date.available | 2020-05-15T05:28:41Z | - |
dc.date.issued | 2021 | - |
dc.identifier.citation | Journal of Financial Markets, 2021, v. 52, article no. 100561 | - |
dc.identifier.issn | 1386-4181 | - |
dc.identifier.uri | http://hdl.handle.net/10722/282482 | - |
dc.description.abstract | We study the role of goodwill, an important form of intangible assets arising from merger and acquisitions (M&As), on asset pricing. We find that goodwill-to-sales strongly and negatively predicts the cross-section of U.S. stock returns, especially among firms with cross-industry M&As and firms with overconfident CEOs. It remains an economically and statistically significant predictor of stock returns after adjustment for common factors. Our results suggest that goodwill-to-sales subsumes information on firm value, and stock markets underreact to this information because the fair value of goodwill is unobservable and hard to evaluate. | - |
dc.language | eng | - |
dc.publisher | Elsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/finmar | - |
dc.relation.ispartof | Journal of Financial Markets | - |
dc.subject | Goodwill | - |
dc.subject | Return predictability | - |
dc.subject | Cash flows | - |
dc.subject | Underreaction | - |
dc.subject | Market inefficiency | - |
dc.title | The invisible burden | - |
dc.type | Article | - |
dc.identifier.email | ZHENG, W: zhengwn@connect.hku.hk | - |
dc.description.nature | link_to_subscribed_fulltext | - |
dc.identifier.doi | 10.1016/j.finmar.2020.100561 | - |
dc.identifier.scopus | eid_2-s2.0-85083856558 | - |
dc.identifier.hkuros | 309873 | - |
dc.identifier.volume | 52 | - |
dc.identifier.spage | article no. 100561 | - |
dc.identifier.epage | article no. 100561 | - |
dc.identifier.isi | WOS:000618640300007 | - |
dc.publisher.place | Netherlands | - |
dc.identifier.issnl | 1386-4181 | - |