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Tobin’s Q and Sectoral Investment in West Germany and Great Britain

Year:    1989

Author:    Funke, Michael, Wadewitz, Sabine, Willenbockel, Dirk

Journal of Contextual Economics – Schmollers Jahrbuch, Vol. 109 (1989), Iss. 3 : pp. 399–420

Abstract

This paper has explored the determinants of industry investment in a cross-section and time-series study for West Germany and Great Britain. The underlying Q model of investment behaviour is formulated on the basis of profit-maximizing firms which are supposed to be constrained in the product market. The model is estimated for a sample of 12 industries and 11 years (1975 - 1985). The results obtained confirm the view that lagged Q exert a significant influence on investment. Finally, a significant impact of output terms irrespective of Q was found.

Journal Article Details

Publisher Name:    Global Science Press

Language:    Multiple languages

DOI:    https://doi.org/10.3790/schm.109.3.399

Journal of Contextual Economics – Schmollers Jahrbuch, Vol. 109 (1989), Iss. 3 : pp. 399–420

Published online:    1989-03

AMS Subject Headings:    Duncker & Humblot

Copyright:    COPYRIGHT: © Global Science Press

Pages:    22

Author Details

Funke, Michael

Wadewitz, Sabine

Willenbockel, Dirk

  1. Asset prices and real investment in West Germany: Evidence from vector autoregressive models

    Funke, M.

    Empirical Economics, Vol. 14 (1989), Iss. 4 P.307

    https://doi.org/10.1007/BF01972455 [Citations: 3]
  2. Application of the time-varying parameter model to the Q theory of investment

    Funke, Michael

    Applied Economics, Vol. 22 (1990), Iss. 1 P.97

    https://doi.org/10.1080/00036849000000054 [Citations: 3]