Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5101235 | Journal of the Japanese and International Economies | 2017 | 21 Pages |
Abstract
We explain the differences in Tobin's q among Japanese manufacturing firms after the bubble burst in the early 1990s based on their physical and R&D capital investment. We calculate (estimate) the contribution of each block of physical and R&D capital investment to explain differences in Tobin's q by estimating each capital's unit's shadow values and their contributions to the differences in the realized Tobin's q. The steady growth of R&D capital after the bubble burst increased the R&D capital relative to the physical capital. The combined effect of this relative stock ratio and R&D capital's shadow value explain the high Tobin's q in highly R&D intensive firms. Conversely, Tobin's q is an inappropriate measure of physical capital investment in such highly R&D intensive firms.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Kazuyuki Suzuki, Ryokichi Chida,