Please use this identifier to cite or link to this item:
http://hdl.handle.net/10397/89566
Title: | Explaining the asset growth anomaly in the restaurant industry : motivations and consequences | Authors: | Mun, SG Jang, S |
Issue Date: | Feb-2022 | Source: | Tourism economics, Feb. 2022, v. 28, no. 1, p. 62-82 | Abstract: | Many business leaders have the tendency to vigorously pursue rapid firm growth, but this focus is often criticized as problematic in terms of operating performance. Accordingly, this study suggested that the asset growth anomaly is an inevitable phenomenon for growing restaurant firms: operating profitability increases as assets grow to the optimum level and then decreases after this level. However, most restaurant firms invest their capital below the optimum level, and only a small number of restaurant firms increase their assets too rapidly. Further, the amount of a chief executive officer’s (CEO’s) bonus payments motivates their investments in asset growth, while the amount of stock options increases the probability of overinvestment practices in restaurant firms. Therefore, even though overinvestment practices are not apparent in most restaurant firms, an appropriate proportion of equity-based incentives is beneficial to prevent overinvestment practices by a few restaurant firms to avoid negatively impacting shareholders’ wealth. | Keywords: | Asset growth Asset turnover CEO compensation Investment-Return Overinvestment Return on asset |
Publisher: | IP Publishing Ltd | Journal: | Tourism economics | ISSN: | 1354-8166 | EISSN: | 2044-0375 | DOI: | 10.1177/1354816620954587 | Rights: | This is the accepted version of the publication Mun, S. G., & Jang, S. (Shawn). (2022). Explaining the asset growth anomaly in the restaurant industry: Motivations and consequences. Tourism Economics, 28(1), 62–82. Copyright © 2020 (The Author(s)). DOI: 10.1177/1354816620954587. |
Appears in Collections: | Journal/Magazine Article |
Files in This Item:
File | Description | Size | Format | |
---|---|---|---|---|
Mun_Anomaly_Restaurant_Industry.pdf | Pre-Published version | 959.91 kB | Adobe PDF | View/Open |
Page views
53
Last Week
1
1
Last month
Citations as of Apr 28, 2024
Downloads
26
Citations as of Apr 28, 2024
SCOPUSTM
Citations
4
Citations as of Apr 26, 2024
WEB OF SCIENCETM
Citations
3
Citations as of May 2, 2024
Google ScholarTM
Check
Altmetric
Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.