The roles of expected profitability, Tobin's Q and cash flow in econometric models of company investment.
Evidence that cash flow has a significant effect on company investment spending, after controlling for Tobin's average Q, has often been interpreted as suggesting the importance of financing constraints. Recent work on measurement error in the Q model casts doubt on this interpretation. It is p...
| Main Authors: | , , , , |
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| Format: | Working paper |
| Language: | English |
| Published: |
Institute for Fiscal Studies
2004
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