On the measurement of Tobin's q

• 成果类型: Article
• 署名作者: Lewellen, WG; Badrinath, SG
• 署名单位: Rutgers University System; Rutgers University New Brunswick; Rutgers University Camden
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/S0304-405X(96)00013-X
• 发表日期: 1997
• 页码: 77-122
• 关键词: corporate performance; asset valuation; inflation

摘要

We examine the methods commonly employed to estimate Tobin's q ratios and find them to be flawed in design and arbitrary in implementation. We propose an alternative procedure which is both simpler and more accurate. The key to the procedure is an improved measure of fixed asset replacement costs, through the proper identification of the vintages of fixed assets that are in place for a firm. Application of this procedure to a large sample of nonfinancial corporations indicates that existing methods generally produce downward-biased measures of ci, and can result in errors in the ordering of firms by their q's.