Why Did the Q Theory of Investment Start Working?

Andrei, Daniel; Mann, William; Moyen, Nathalie

doi:10.2139/ssrn.3073938

Cited by 10 publications

(14 citation statements)

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“…In Figure 9, whether it is traditional credit or EOGC, the bank's economic benefits increase with the increase in Tobin-q and decrease with the increase in the credit risk. This result verifies the conclusion of Andrei et al [5], in which the enterprise's Tobin-q plays an important role in investment decision-making. Due to the volatility of asset allocation decisions and asset markets, banking financial institutions prefer to base their capital allocation process on the concept of shareholder value [67] and tend to prove tradeoffs between profits and risks.…”

Section: Scenariossupporting

confidence: 89%

“…The investment decision of the enterprise is to maximize the present value of future expected profit deducted investment cost. Referring to Andrei et al [5] and Peters et al [59], the enterprise value model is constructed as follows:…”

Section: Benefits Model (1) Economic Benefits Model Of the Bankmentioning

confidence: 99%

“…The first item on the right side of equation 5represents the purchase cost, and the last item represents the adjustment cost [5,59]. ρ ina and ρ f ia represent the adjustment cost parameter of intangible asset investment and fixed asset investment, respectively.…”

Section: Benefits Model (1) Economic Benefits Model Of the Bankmentioning

confidence: 99%

“…Innovation jump theory proposes that an innovation will make the return on capital jump [75], and the jump size may be a constant or drawn from a probability distribution [26]. Therefore, for simplicity, this paper set J as a constant, which is also applied in Andrei et al [5].…”

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confidence: 99%

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Can the reform of green credit policy promote enterprise eco-innovation? A theoretical analysis

Wu¹,

Wu²,

Zhao³

2022

JIMO

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The weakness that China's traditional credit fails to effectively limit enterprise emissions has become increasingly evident. Although the industryoriented green credit policy has achieved certain effects on environmental performance through the differentiated resource allocation of the industries, banking financial institutions have the ambiguity in the definition of the credit object and the characteristics of profit maximization, which cannot achieve the essential purpose of green credit sustainably. Hence, we propose a new eco-innovation-oriented green credit policy. We prove theoretically that the new green credit is feasible and can be used as an exogenous driver for improving enterprises' eco-innovation. Contrasting with traditional credit, the newly proposed credit policy is an expansionary monetary policy, which has the characteristics of expanding credit lines and differential interest rates. Utilizing evolutionary game theory, we calculate the evolution stability conditions of green credit and eco-innovation. The results show that the key to green credit to maintaining sustainable development is the return on investment due to eco-innovation. Our theoretical analysis also reveals that environmental benefit-cost ratios and adjustment cost parameters of different assets are the important factors for green credit. 2020 Mathematics Subject Classification. 91B03.

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Section: Scenariossupporting

confidence: 89%

Section: Benefits Model (1) Economic Benefits Model Of the Bankmentioning

confidence: 99%

Section: Benefits Model (1) Economic Benefits Model Of the Bankmentioning

confidence: 99%

mentioning

confidence: 99%

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Can the reform of green credit policy promote enterprise eco-innovation? A theoretical analysis

Wu¹,

Wu²,

Zhao³

2022

JIMO

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“…We also note that the existence of significant intangible assets can explain the relatively poor historical performance of Tobin's Q (the ratio of a firm's market-to-book value) in explaining capital investment (Crouzet and Eberly 2018). Accounting for organizational investments, human capital, and business processes can strengthen the link between observed investment and asset prices (Hall 2000;McGrattan and Prescott 2001;Eisfeldt andPapanikolaou 2013, 2014;Peters and Taylor 2017;Kogan et al 2017;Andrei, Mann, and Moyen 2018).…”

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confidence: 99%

The Productivity J-Curve: How Intangibles Complement General Purpose Technologies

2019

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an anonymous reviewer, and numerous seminar participants for helpful comments. The MIT Initiative on the Digital Economy provided valuable funding. We dedicate this paper to the memory of Shinkyu Yang, whose pioneering insights on the role of intangibles inspired us. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. At least one co-author has disclosed a financial relationship of potential relevance for this research. Further information is available online at http://www.nber.org/papers/w25148.ack NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

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Financial contracting as behavior towards risk: The corporate finance of business cycles

Krainer

2023

Journal of Financial Stability

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Why Did the Q Theory of Investment Start Working?

Cited by 10 publications

References 50 publications

Can the reform of green credit policy promote enterprise eco-innovation? A theoretical analysis

Can the reform of green credit policy promote enterprise eco-innovation? A theoretical analysis

The Productivity J-Curve: How Intangibles Complement General Purpose Technologies

Financial contracting as behavior towards risk: The corporate finance of business cycles

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