The Association Between Investment Opportunity Set Proxies and Realized Growth

Kallapur, S and Trombley, M A (2003) The Association Between Investment Opportunity Set Proxies and Realized Growth. Journal of Business Finance & Accounting, 26 (3‐4). pp. 505-519. ISSN 1468-5957

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Abstract

Realized growth can be viewed as a proxy for the unobservable investment opportunity set (IOS) of the firm, and provides a benchmark against which IOS proxy variables can be compared. Results from such a comparison indicate that many of the variables from earlier studies, including book-to-market measures and capital expenditure to assets ratios are consistently correlated with subsequently realized growth. However, R&D intensity and E/P ratios do not exhibit any consistent association with subsequent growth indicating that they may not be valid IOS proxies.

Item Type: Article
Additional Information: The research article was published by the author with the affiliation of Purdue University.
Subjects: Business and Management
Accounting
Date Deposited: 06 Mar 2019 08:00
Last Modified: 16 Jul 2023 06:04
URI: https://eprints.exchange.isb.edu/id/eprint/668

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