Marginal q revisited
2016 (English)In: Applied Economics, ISSN 0003-6846, E-ISSN 1466-4283, Vol. 48, no 1, 52-58 p.Article in journal (Refereed) PublishedText
Two measures of firm investment behaviour used in the empirical research are Tobin's q (average q) and marginal q. The marginal q is a more recently introduced measure than Tobin's q and is not as well known. This article aims to demonstrate the advantages of using marginal q as a performance measure and is a response to an earlier critical article (Berglund, 2011) claiming an elusiveness bias. The pro arguments made in response are that the claimed elusiveness is not a problem. Furthermore, many of the evaluation problems inherent in the empirical use of Tobin's q, like estimation of replacement cost of assets, can be avoided. From a pure theoretical standpoint, it has long been recognized that marginal q is superior to an average measure of investment behaviour such as Tobin's q.
Place, publisher, year, edition, pages
2016. Vol. 48, no 1, 52-58 p.
Tobin's q, marginal q, investment, assets in place
IdentifiersURN: urn:nbn:se:hj:diva-29997DOI: 10.1080/00036846.2015.1073842ISI: 000364836400006ScopusID: 2-s2.0-84947027837OAI: oai:DiVA.org:hj-29997DiVA: diva2:930160