The distribution and regulation of Tobin's q

•The US distribution of Tobin's q has a stable functional form over 50 years.•Ln[q] conforms to Asymmetric Laplace functions with time-varying parameters.•Theories of q must be mathematically equivalent to these observations.

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.