On " q."

Keith M Howe and Stephen Vogt

The Financial Review, 1996, vol. 31, issue 2, 265-86

Abstract: The introduction of Tobin's q ratio in the literature has prompted noteworthy advances in economic model building and empirical analysis. A major shortcoming has been the lack of a convincing measure of marginal q. Herein an alternative approach for measuring marginal q is presented, one based on an event study of capital expenditure announcements. The measures of marginal q are shown to yield reasonable and consistent estimates. The marginal q variables perform well against the hypothesized relationships developed from q theory. A key result is that classifying firms according to their average q measures as a proxy for marginal q is likely to lead to classification problems. Copyright 1996 by MIT Press.

Date: 1996
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Persistent link: https://EconPapers.repec.org/RePEc:bla:finrev:v:31:y:1996:i:2:p:265-86

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