Intangible capital in the pharmaceutical & chemical industry
AbstractWe investigate whether measures of intangible capital based on advertising and R&D can explain variation in Tobin’s Q ratio for the pharmaceutical & chemical industry using data from 1982 to 2001. The study is motivated by prior literature studying this relation in other industries, recent literature investigating intangible capital in this industry, and the larger controversy about whether stock valuations have been high due to irrational investors or large investment in intangible capital. We find that our measures of intangible capital are statistically significant determinants of Tobin’s Q and explain twenty percent of the variation in our sample.
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Bibliographic InfoPaper provided by University of New Orleans, Department of Economics and Finance in its series Working Papers with number 2003-04.
Length: 21 pages
Date of creation: 15 Feb 2003
Date of revision:
Intangibles; Research and Development (R&D); Advertising; Chemicals; Pharmaceuticals;
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- G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
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