Corporate Investment , Book-to-Market , Firm Size , and Stock Returns : Empirical Evidence

  title={Corporate Investment , Book-to-Market , Firm Size , and Stock Returns : Empirical Evidence},
  author={Christopher W. Anderson and Luis Garcia-Feij{\'o}o},
We examine the empirical relations among firm-level investment growth, market value of equity, bookto-market ratio (B/M), and stock returns. Under the widely used Fama and French (FF) methods, firms classified as big and low-B/M (B/L) significantly accelerate investment prior to the classification year. Their market values of equity rise and their leverage levels diminish. Firms classified as small and highB/M (S/H) reduce investment and increase leverage. In other words, FF classification… CONTINUE READING


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