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The distribution and regulation of Tobin’s q

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  • Scharfenaker, Ellis
  • dos Santos, Paulo L.

Abstract

This paper reports on the empirical distribution of Tobin’s q for over 20,000 US-listed corporations between 1962 and 2014. Contemporaneous frequency distributions are shown to conform consistently to the Asymmetric Laplace function. We draw on the Principle of Maximum Entropy to develop an account of this distribution, whose mathematical form constitutes an innovative criterion for judging the empirical success of theorizations of the determinants of Tobin’s q.

Suggested Citation

  • Scharfenaker, Ellis & dos Santos, Paulo L., 2015. "The distribution and regulation of Tobin’s q," Economics Letters, Elsevier, vol. 137(C), pages 191-194.
    • Handle: RePEc:eee:ecolet:v:137:y:2015:i:c:p:191-194
    DOI: 10.1016/j.econlet.2015.11.008
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Paulo L. dos Santos, 2017. "The Principle of Social Scaling," Complexity, Hindawi, vol. 2017, pages 1-9, December.
    2. Xia, Dan & Wang, Xiang-Qian, 2021. "The synergetic impact of environmental and innovation information disclosure on corporate financial performance: An empirical study based on China coal listed companies," Technovation, Elsevier, vol. 100(C).
    3. Ellis Scharfenaker & Gregor Semieniuk, 2017. "A Statistical Equilibrium Approach to the Distribution of Profit Rates," Metroeconomica, Wiley Blackwell, vol. 68(3), pages 465-499, July.
    4. Paulo L. dos Santos & Jangho Yang, 2018. "Arbitrage, Information, and the Competitive Organization of Distributions of Profitability," Working Papers 1803, New School for Social Research, Department of Economics.
    5. Noe Wiener, 2019. "Diversity in Segmention. Patterns of Immigrant Competition in US Labor Markets," Working Papers 1901, New School for Social Research, Department of Economics.
    6. Noe Wiener, 2018. "Measuring Labor Market Segmentation from Incomplete Data," UMASS Amherst Economics Working Papers 2018-01, University of Massachusetts Amherst, Department of Economics.
    7. Jangho Yang, 2018. "Information Theoretic Approaches In Economics," Journal of Economic Surveys, Wiley Blackwell, vol. 32(3), pages 940-960, July.

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    More about this item

    Keywords

    Tobin’s q; Statistical equilibrium; Asymmetric Laplace; Maximum entropy;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • C16 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Econometric and Statistical Methods; Specific Distributions
    • G1 - Financial Economics - - General Financial Markets
    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models

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