Non-linear response of firm investment to q: Evidence from Greek listed firms-Reference-Cited by-同舟云学术

Non-linear response of firm investment to q: Evidence from Greek listed firms

Published:2019 Issue:1 Volume:9 Page:53-63
ISSN:2077-4303
Container-title:Risk Governance and Control: Financial Markets and Institutions
language:en
Short-container-title:RGC

Author:

Kallandranis Christos^ORCID

Abstract

A dynamic-panel model is applied in order to empirically investigate the relationship between business fixed investment and Tobin’s q for the firms listed in the Athens Stock Exchange (ASE). In particular, we search for non-linearities in the underlying relationship between investment and fundamentals, consistent with the presence of multiple regimes. The empirical results support a discontinuity identifying two-regimes: (a) wherein the first (for values of q below a certain threshold) investment is inelastic to q, while in the second it exhibits a positive relationship, and b) a further non-linearity expressed in a concavity of the investment- q relationship implying that for the segment where investment reacts to fundamentals positively, it does so at a decreasing rate evidence which is consistent with the presence of non-convexities in adjustment costs

Publisher

Virtus Interpress

Subject

Strategy and Management,Economics and Econometrics,Finance

Link

https://virtusinterpress.org/IMG/pdf/rgcv9i1p51.pdf

Reference56 articles.

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