The New Decomposition Asset Growth Effect. An Empirical Evidence of Indonesia
The New Decomposition Asset Growth Effect. An Empirical Evidence of Indonesia

Summary/Abstract: This paper provides new evidence for a causal effect of asset growth on stock returns by using decomposition method. The sample used in this research is non-financial manufacturing firms listed in Indonesia Stock Exchange (IDX) in the year of 2010 - 2015. The asset growth testing was done by conducting regression analysis. The paper results were indicated by using decomposition method for a causal effect of asset growth, book-to-market, and firm size on stock return. In addition, assets and liabilities decomposition known that the growth of fixed assets and retained earnings have a positive influence to return firms. The result by decomposition method asset growth has a positive effect on stock returns, or in other words, the higher the asset growth, the higher the stock return. Others, the cash growth negatively affect to stock returns at the time of the asset and operating liabilities have a negative significant effect on stock returns. The decomposition method asset growth has a positive effect on stock returns, in other words, the higher the asset growth, the higher the stock return. At last, the cash growth negatively affects to stock returns at the time of the asset and operating liabilities have a negative significant effect on stock returns.

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