Gugler, Klaus, Mueller, Dennis, Yurtoglu, B. Burcin. 2003. Average q, Marginal q, Cash Flow and Investment. Southern Economic Journal 70 (3): 512-531.
BibTeX
Abstract
Many studies of the determinants of investment use Tobin's q to control for the investment opportunities of a firm. Tobin's q roughly measures the average return on a firm's capital anticipated by the market. More relevant for investment decisions, however, is the marginal return on capital. In this paper we estimate investment and R&D equations using a measure of marginal q. We use marginal q to identify the existence of cash constraints and managerial discretion, and as a separate explanatory variable. For a sample of 560 U.S. firms observed over the 1977-1996 period we present evidence confirming the existence of both cash constraints in some companies and managerial discretion in others.
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Status of publication | Published |
---|---|
Affiliation | WU |
Type of publication | Journal article |
Journal | Southern Economic Journal |
Citation Index | SSCI |
WU Journalrating 2009 | A |
WU-Journal-Rating new | VW-D |
Language | English |
Title | Average q, Marginal q, Cash Flow and Investment |
Volume | 70 |
Number | 3 |
Year | 2003 |
Page from | 512 |
Page to | 531 |
Associations
- People
- Gugler, Klaus (Details)
- External
- Mueller, Dennis (Universität Wien, Austria)
- Yurtoglu, B. Burcin (Universität Wien, Austria)
- Organization
- Research Institute for Regulatory Economics FI (Details)
- Department of Economics (Gugler) (Details)