Investment-related anomalies in Australia: evidence and explanations

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This paper documents the existence of five investment-related anomalies in the Australian market. Cross-sectional stock returns are negatively related to each of asset growth, net operating assets, inventory growth and investment-to-assets, and positively related to asset tangibility. While the investment-return relation is theoretically motivated by q-theory, there is only support for the q-theory explanation in relation to the investment-to-assets effect. Limits to arbitrage appear to be a factor in the asset-tangibility effect, where the mispricing can be traced to the over-pricing of stocks with high levels of goodwill.

Original languageEnglish
Pages (from-to)97-109
Number of pages13
JournalInternational Review of Financial Analysis
Publication statusPublished - Jan 2019


  • Anomalies
  • Asset growth
  • Asset tangibility
  • Investment
  • Mispricing
  • Net operating assets
  • q -Theory

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