• ISSN: 2301-3567 (Print), 2972-3981 (Online)
    • Abbreviated Title: J. Econ. Bus. Manag.
    • Frequency: Quarterly
    • DOI: 10.18178/JOEBM
    • Editor-in-Chief: Prof. Eunjin Hwang
    • Executive Editor: Ms. Fiona Chu
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HOME > Archive > 2022 > Volume 10 Number 1 (Feb. 2022) >
JOEBM 2022 Vol.10(1): 9-16 ISSN: 2301-3567
DOI: 10.18178/joebm.2022.10.1.666

Do Chinese Investors Underact to Goodwill

Yongqing Li

Abstract—This paper mainly studies the goodwill of intangible assets, and holds that both goodwill and sales include enterprise value information. The results show that goodwill can predict the future return of China's stock market, indicating that investors in China's stock market do not respond adequately to the information contained in goodwill. In addition, this paper also finds that the company's organizational structure not only affects the company's M & A behavior, but also affects the predictability of the company's future stock returns. Specifically, in China, goodwill can predict the future stock returns of non-state-owned enterprises, but can’t predict the future stock returns of state-owned enterprises, and this difference is not due to the scale of the company.

Index Terms—Goodwill, China's market, cross-sectional stock return predictability, state-owned enterprises.

Tan Siu Lin is with the Business School, Quanzhou Normal University, China (e-mail: yongqingfr_e@163.com).

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Cite:Yongqing Li, "Do Chinese Investors Underact to Goodwill," Journal of Economics, Business and Management vol. 10, no. 1, pp. 9-16, 2022.

Copyright © 2022 by the authors. This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).

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