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Functional Form in Regression Models of Tobin's q

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Author Info

  • Hirsch, Barry T
  • Seaks, Terry G

Abstract

The Box-Cox transformation is used to compare alternative functional forms of market value equations. Based on evidence from a panel of 480 publicly-traded U.S. manufacturing companies and two additional data sets used previously in the literature, the semilog form of a Tobin's q equation is found to be strongly preferred to the commonly estimated linear form. The authors provide illustrations in which inferences can be affected by the choice of functional form. Copyright 1993 by MIT Press.

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Bibliographic Info

Article provided by MIT Press in its journal Review of Economics & Statistics.

Volume (Year): 75 (1993)
Issue (Month): 2 (May)
Pages: 381-85

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Handle: RePEc:tpr:restat:v:75:y:1993:i:2:p:381-85

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Web page: http://mitpress.mit.edu/journals/

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Cited by:
  1. Michael Devaney & William Weber, 2005. "Efficiency, Scale Economies, and the Risk/Return Performance of Real Estate Investment Trusts," The Journal of Real Estate Finance and Economics, Springer, vol. 31(3), pages 301-317, November.
  2. Moses Acquaah & Tailan Chi, 2007. "A longitudinal analysis of the impact of firm resources and industry characteristics on firm-specific profitability," Journal of Management and Governance, Springer, vol. 11(3), pages 179-213, September.
  3. Shameek Konar & Mark A. Cohen, 2001. "Does The Market Value Environmental Performance?," The Review of Economics and Statistics, MIT Press, vol. 83(2), pages 281-289, May.
  4. Philip Hersch & Jeffry Netter & Christopher Pope, 2008. "Do Campaign Contributions and Lobbying Expenditures by Firms Create “Political” Capital?," Atlantic Economic Journal, International Atlantic Economic Society, vol. 36(4), pages 395-405, December.
  5. Ling Hui Tan & Carlos D. Ramírez, 2003. "Singapore, Inc. Versus the Private Sector," IMF Working Papers 03/156, International Monetary Fund.
  6. Sandner, Philipp G. & Block, Joern, 2011. "The market value of R&D, patents, and trademarks," Research Policy, Elsevier, vol. 40(7), pages 969-985, September.
  7. Marcelo Bianconi & Liang Tan, 2009. "Cross-listing Premium in the US and the UK Destination," Discussion Papers Series, Department of Economics, Tufts University 0737, Department of Economics, Tufts University.
  8. Andreas Ziegler, 2012. "Is it Beneficial to be Included in a Sustainability Stock Index? A Panel Data Study for European Firms," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 52(3), pages 301-325, July.
  9. Green, T. Clifton & Jame, Russell, 2013. "Company name fluency, investor recognition, and firm value," Journal of Financial Economics, Elsevier, vol. 109(3), pages 813-834.
  10. Iwata, Hiroki & Okada, Keisuke, 2010. "How does environmental performance affect financial performance? Evidence from Japanese manufacturing firms," MPRA Paper 27721, University Library of Munich, Germany.
  11. Iwata, Hiroki & Okada, Keisuke, 2011. "How does environmental performance affect financial performance? Evidence from Japanese manufacturing firms," Ecological Economics, Elsevier, vol. 70(9), pages 1691-1700, July.

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