FUNCTIONAL FORM IN REGRESSION-MODELS OF TOBIN-Q

Authors
HIRSCH BT SEAKS TG
Citation
Bt. Hirsch et Tg. Seaks, FUNCTIONAL FORM IN REGRESSION-MODELS OF TOBIN-Q, Review of economics and statistics, 75(2), 1993, pp. 381-385
Citations number
16
Categorie Soggetti
Social Sciences, Mathematical Methods",Economics
Journal title
Review of economics and statistics → ACNP
ISSN journal
00346535
Volume
75
Issue
2
Year of publication
1993
Pages
381 - 385
Database
ISI
SICI code
0034-6535(1993)75:2<381:FFIROT>2.0.ZU;2-B
Abstract
The Box-Cox transformation is used to compare alternative functional f orms of market value equations. Based on evidence from a panel of 480 publicly-traded U.S. manufacturing companies and two additional data s ets used previously in the literature, the semilog form of a Tobin's q equation is found to be strongly preferred to the commonly estimated linear form. We provide illustrations in which inferences can be affec ted by the choice of functional form.