Tobin's "Q", Debt Overhang, and Investment

By C. Hennessy. 2004

368 citations recorded by the source corpus.

Subfields: Accounting, Finance, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/55d9c9c2e66e86c453db2d4830eb1866e1077d3f

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Citations in the corpus

The effects of financial reporting and disclosure on corporate investment: A review (2019, background): “8 See, e.g., Kaplan and Zingales (1997), Erickson and Whited (2000), Gomes (2001), Hennessy (2004), Farre-Mensa and Ljungqvist (2016), Peters and Taylor (2017), and Bartlett and Partnoy (2018), among others.”
Why Do Firms Use High Discount Rates (2016, neutral): “Thus, if financial constraints lead firms to use higher 14 Mello and Parsons (1992), Parrino and Weisbach (1999), Hennessy (2004), and Moyen (2007) estimate the magnitude of these costs.”
Cash Flow Management and Manufacturing Firm Financial Performance: A Longitudinal Perspective (2014, methodology): “Tobin’s q, which is the ratio of the market value of a firm to the replacement value of its assets, has been employed widely as an indicator of firm financial performance (Lindenberg & Ross, 1981; Dowell et al. 2000; Hennessy, 2004; Kroes et al., 2012).”
Corporate social responsibility, firm value, and influential institutional ownership (2018, background): “One important reason is that corporate debt can distort firm investment, especially long- term investment, and lead to severe underinvestment (Hennessy, 2004).”
Family ownership, financing constraints and investment decisions (2011, neutral): “Hennessy, C. A. (2004), ‘Tobin’s q, debt overhang, and investment’, Journal of Finance, Vol.”
Which Firms Follow the Market? An Analysis of Corporate Investment Decisions (2010, neutral): “See Hennessy (2004), Rauh (2006), Almeida and Campello (2007), Polk and Sapienza (2007), and Sabia (2007a,b).”
Dynamic Investment, Capital Structure, and Debt Overhang (2015, background): “(Myers (1977) and Hennessy (2004) ) . We leave the modeling of debt maturity for future”
Explaining Corporate Capital Structure: Product Markets, Leases, and Asset Similarity (2012, positive): “Our findings are supportive of research that emphasizes the link between financial structure and real aspects of the firm (Williamson (1988), Hart and Moore (1994, 1998), Diamond and Rajan (2001), Hennessy (2004), Hennessy and Whited (2005), MacKay and Phillips (2005)).”
Performance-Sensitive Debt (2010, background): “Asquith, Gertner, and Scharfstein (1994) and James (1995) provide evidence that debt renegotiation may loosen financial constraints on firms.”
Panel Smooth Transition Regression Models (2005, background): “Both of these may lead to spurious effects of cash flow and leverage on investment, as discussed at length in Gilchrist and Himmelberg (1995), Erickson and Whited (2000), Gomes (2001), and Hennessy (2004), among others.”
A Model of Dynamic Compensation and Capital Structure (2011, positive): “The reason is debt-overhang, where I interpret the agent’s effort as a form of investment; see Hennessy (2004) for a similar mechanism.”
Spin-Offs, Divestitures, and Conglomerate Investment (2007, positive): “They measure diversity via the entropy measure from Palepu (1985), which we also adopt. They also argue that firms spin off divisions to improve the divisions’ transparency. In this case the level of asymmetric information should be able to predict a spin-off. We adopt two of their proxies. The firs”