Returns To Equity, Investment And Q: Evidence From The Uk
AbstractConventional wisdom has it that Tobin's Q cannot help explain aggregate investment. However, the standard linearized present-value asset price decomposition suggests that it should be able to predict other variables, such as stock returns. Using a new data set for the UK, we find that Q has strong predictive power for debt accumulation, stock returns and UK business investment. The correctly signed results on both returns and investment appear to be robust, and are supported by the commonly used and bootstrapped standard error corrections, as well as recently developed asymptotic corrections. Copyright Blackwell Publishing Ltd and The University of Manchester, 2005.
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Bibliographic InfoArticle provided by University of Manchester in its journal The Manchester School.
Volume (Year): 73 (2005)
Issue (Month): s1 (09)
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- Parantap Basu & Max Gillman & Joseph Pearlman, 2010.
"Inflation, Human Capital and Tobin's q,"
IEHAS Discussion Papers, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences
1017, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
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