of investment requires a new idea, an quot;optionquot;. When options are scarce, new capital is harder to put in place …, Q rises gradually, as options are used up. Because investment represents an exercise of options, it has an intertemporal …

This study comprehensively reexamines the debate over behavioral and rational explanations for the investment effect in … prominent measures of corporate investment and corporate profitability either as a standard control or as a structural variable … in q-theory and recent investment-based asset pricing models. We test simple composite indices of limits-to-arbitrage or …

To study the impact of stochastic interest rates and capital illiquidity on investment and firm value, we incorporate a … of the stochastic interest rates and capital illiquidity on investment, Tobin's average q, the duration and user cost of …

with frictions in the adjustment of both capital and labor. We posit that hiring of labor is akin to investment in capital ….S. corporate sector data to estimate firms' optimal hiring and investment decisions and the consequences for firms' value. We then … investment and physical capital. We find that a conventional specification - quadratic adjustment costs for capital and no hiring …

We study how investors' preferences for robustness influence corporate investment, financing, and compensation … ambiguity aversion lowers Tobin’s q, the average investment, and investment volatility. The entrepreneur values the project at …

We study the effects of monetary-policy-induced changes in Tobin's q on corporate investment and capital structure. We … evidence, and quantify the relevance for monetary transmission to aggregate investment …

Leading production-based asset pricing models predict that the sources of fluctuations in real investment and (scaled …-implied marginal Q. We find that the bulk of fluctuations in Q (or alternatively, aggregate investment) is driven by expected … investment return (discount rate) shocks. Yet, expected marginal profit shocks play a non-negligible role. Our findings are …

maximize firm value given financial market prices, disagreement alters firms' value-maximizing investment policies …. Disagreement therefore impacts aggregate investment, consumption, and output. In a production economy with recursive preferences … and disasters, we demonstrate that static disagreement among investors generates dynamic aggregate investment that is …

We study the determinants of aggregate corporate investment in the U.S. We use accounting identities to develop a … measurement problems with Tobin's q, the variable that is typically used in investment regressions; and (ii) current cash flow …. First, the lion's share of investment variation is driven by current cash flow shocks instead of news about the future. This …