Investment and q with Fixed Costs: An Empirical Analysis

By Andrew B. Abel, Janice C. Eberly. 2001

190 citations recorded by the source corpus.

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Citations in the corpus

Zeros and Lumps in Investment: Empirical Evidence on Irreversibilities and Nonconvexities (2003, background): “The basic implications of irreversibility (non-negativity of investment) were originally analyzed by Arrow (1968) and later by Lucas and Prescott (1971), Nickell (1974) and (1978), and, more recently, by Bertola and Caballero (1994), Dixit and Pindyck (1994), Abel and Eberly (1994).”
Does Earnings Management Affect Firms' Investment Decisions? (2008, background): “However, Abel and Eberly (2002) show that adjustment costs are not linear and thus the relationship between investment and Tobin's Q is a function of Tobin's Q.”
On the Nature of Capital Adjustment Costs (2006, unknown): “A model without adjustment costs is excessively responsive to shocks and, somewhat surprisingly, this response is clearly nonlinear.(4) From this perspective, the role of adjustment costs is to temper the response of investment to fundamentals.”
Investment Spikes: New Facts and a General Equilibrium Exploration (2007, unknown): “Abel and Eberly (2002) in their study of listed firms find a similar magnitude of adjustment costs (between 1.1 and 9.7 percent of investment).”
Noisy share prices and the Q model of investment (2001, background): “The relevant issue then is whether the non-linearities are a primitive feature of the structural model, 15 Please Do Not Circulate or Quote as emphasized by Abel and Eberly (1996), or whether measurement error is responsible.”
Asset Pricing in a Production Economy with Chew-Dekel Preferences (2007, unknown): “Interestingly, Abel and Eberly (2002) also estimate that adjustment costs amount to 1.1% of the cost of investment in manufacturing, and to 9.7% in non–manufacturing sectors.”
Investment, Idiosyncratic Risk, and Ownership (2011, unknown): “6 We use a semi-log specication to capture the possibility, suggested by Abel and Eberly (1996, 2002) and Eberly (1997), that the investment-Q relationship is not linear.”
Employment Changes, the Structure of Adjustment Costs, and Plant Size (2003, background): “presence of fixed adjustment costs and irreversibilities (see Abel and Eberly (1994, 1999) ).”
The Value Premium (2005, unknown): “The average rate of investment is 0.135 in the model, close to 0.15 in the data reported by Abel and Eberly (2001).”