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Cover Get access The Review of Financial Studies, Volume 25, Issue 9, September 2012, Page i1, https://doi.org/10.1093/rfs/hhs046 Published: 10 August 2012
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Volume 25 Number 7 July 2012The Review of Financial Studies - Table of Contents:
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Cover Get access The Review of Financial Studies, Volume 25, Issue 6, June 2012, Page i1, https://doi.org/10.1093/rfs/hhs034 Published: 21 May 2012
Volume 25 Number 6 June 2012The Review of Financial Studies - Table of Contents:
Journal Article Volume 25 Number 6 June 2012The Review of Financial Studies - Table of Contents Get access The Review of Financial Studies, Volume 25, Issue 6, June 2012, Page i4, https://doi.org/10.1093/rfs/hhs037 Published: 21 May 2012
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Journal Article Cover Get access The Review of Financial Studies, Volume 25, Issue 7, July 2012, Page i1, https://doi.org/10.1093/rfs/hhs038 Published: 16 June 2012
Volume 25 Number 8 August 2012The Review of Financial Studies - Table of Contents:
Volume 25 Number 10 October 2012The Review of Financial Studies - Table of Contents:
Volume 25 Number 10 October 2012The Review of Financial Studies - Table of Contents Get access The Review of Financial Studies, Volume 25, Issue 10, October 2012, Page i4, https://doi.org/10.1093/rfs/hhs013 Published: 14 September 2012
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The Inventory Growth Spread
Previous studies show that firms with low inventory growth outperform firms with high inventory growth in the cross-section of publicly traded firms. In addition, inventory investment is volatile and procyclical, and inventory-to-sales is persistent and countercyclical. We embed an inventory holding motive into the investment-based asset pricing framework by modeling inventory as a factor of production with convex and nonconvex adjustment costs. The augmented model simultaneously matches the large inventory growth spread in the data, as well as the time-series properties of the firm-level capital investment, inventory investment, and inventory-to-sales. Our conditional single-factor model also implies that traditional unconditional factor models such as the CAPM should fail to explain the inventory growth spread, although not with the same large pricing errors observed in the data. The Author 2011. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For Permissions, please e-mail: [email protected]., Oxford University Press.