Erratum: Measurement Error and the Relationship between Investment and q

By Timothy Erickson, Toni M. Whited. Journal of Political Economy, 2010

668 citations recorded by the source corpus.

Subfields: Accounting, Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/93427076b6b09a4fd20b5be2c6cba64d0dec4583

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Citations in the corpus

Cash Holdings and Credit Risk (2012, neutral): “13We prefer R&D to the market-to-book ratio as a proxy for growth opportunities, because in addition to other wellknown problems with market-to-book (Erickson and Whited (2000)), in our setting, it is also mechanically correlated with the market leverage ratio, which renders it unsuitable as a…”
NO DEEP POCKETS: SOME STYLIZED EMPIRICAL RESULTS ON FIRMS' FINANCIAL CONSTRAINTS (2010, neutral): “Finally, another group of literature points out that cash flows might contain information about firms’ investment opportunities, meaning that Q should be corrected (e.g. Chirinko, 1997; Erickson and Whited, 2000; Gomes, 2001; Alti, 2003; Abel and Eberly, 2004; Cummings et al., 2006).”
Determinants of Investment Cash Flow Sensitivity (2009, neutral): “4 For example, Kaplan and Zingales (1997) find significant variations in internal liquidity and other parameters among the low dividend payout firms examined by Fazzari et al. (1988). 5 In particular, it has been applied by Hu and Schiantarelli (1997), Hovakimian and Titman (2006), and Almeida and C”
Does Q-Theory with Investment Frictions Explain Anomalies in the Cross-Section of Returns? (2010, background): “Asset size is a standard measure of financing constraints (e.g., Gilchrist and Himmelberg (1995), Erickson and Whited (2000), and Almeida and Campello (2007)).”
Corporate investment and changes in GAAP (2016, neutral): “This result is robust to controlling for accounting standard fixed effects, potential measurement error in Tobin’s Q (Erickson and Whited 2000), and a number of control variables.”
A review of tax research (2010, neutral): “See Erickson and Whited (2000), Hayashi (1982), Hassett and Hubbard (2002), Summers (1981), Fazzari et al. (1998), Kaplan and Zingales (2000), Hennessey and Whited (2007), Desai and Goolsbee (2004), and Cummins et al. (2006) for further discussions of the q literature.”
Common Errors: How to (and Not to) Control for Unobserved Heterogeneity (2014, methodology): “One way to obtain a consistent estimate is to exploit information contained in higher-order moments of the observed variables in a generalized method of moments (GMM) estimation (Erickson and Whited 2000).”
R&D sensitivity to asset sale proceeds: New evidence on financing constraints and intangible investment (2013, neutral): “Specifically, our primary tests are based on the sensitivity of firm investment in intangible capital (research and 1 For example, see Kaplan and Zingales (1997), Erickson and Whited (2000), Alti (2003), Moyen (2004), and Chen and Chen (2011).”
How Q and Cash Flow Affect Investment without Frictions: An Analytic Explanation (2011, background): “where the first equality follows from equation (11) and the second equality follows from equations (9) and (10).”
Investment and the Weighted Average Cost of Capital (2016, neutral): “This result can be interpreted as evidence of financial constraints, as in the work of Fazzari, Hubbard, and Petersen (1988), or as evidence of measurement error in the proxy for marginal q, as in the work of Erickson and Whited (2000).”
Investment‐Based Expected Stock Returns (2009, methodology): “We use 30 testing portfolios: 10 standardized unexpected earnings (SUE) portfolios as in Chan, Jegadeesh, and Lakonishok (1996), 10 book-to-market (B/M) portfolios as in Fama and French (1993), and 10 corporate investment (CI) portfolios as in Titman, Wei, and Xie (2004).”
Ownership Structure and Financial Constraints: Evidence from a Structural Estimation (2011, neutral): “Indeed, Tobin's q contains a great deal of measurement error as a proxy for investment opportunities (Erickson and Whited, 2000).”
Intangible Capital and the Investment-q Relation (2017, methodology): “Whited (1994) and Erickson and Whited (2000) explain that investment regressions cannot identify the level of adjustment costs.”
The Real Effects of Political Uncertainty: Elections and Investment Sensitivity to Stock Prices (2010, background): “Similarly, Erickson and Whited (2000) raise a concern that 34 The results in this section are not tabulated to save space; they are available from the authors upon request. measurement errors in firm value can bias investment-to-price sensitivity.”