 Contribution of R&D capital to differences in Tobin's q among Japanese manufacturing firms: Evidence from an investment-based asset pricing modelKazuyuki Suzuki and Ryokichi Chida Journal of the Japanese and International Economies, 2017, vol. 43, issue C, 38-58 Abstract: We explain the differences in Tobin's q among Japanese manufacturing firms after the bubble burst in the early 1990s based on their physical and R&D capital investment. We calculate (estimate) the contribution of each block of physical and R&D capital investment to explain differences in Tobin's q by estimating each capital's unit's shadow values and their contributions to the differences in the realized Tobin's q. The steady growth of R&D capital after the bubble burst increased the R&D capital relative to the physical capital. The combined effect of this relative stock ratio and R&D capital's shadow value explain the high Tobin's q in highly R&D intensive firms. Conversely, Tobin's q is an inappropriate measure of physical capital investment in such highly R&D intensive firms. Keywords: Asset pricing model; Tobin's q; R&D capital; Factor adjustment costs: growth options (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jjieco:v:43:y:2017:i:c:p:38-58 DOI: 10.1016/j.jjie.2016.12.001 Access Statistics for this article Journal of the Japanese and International Economies is currently edited by Takeo Hoshi More articles in Journal of the Japanese and International Economies from Elsevier |
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