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A Peer-reviewed scientific articles/A1 Journal article (refereed), original research
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Investment, Tobin’s Q, and cash flow across time and frequencies, Oxford Bulletin of Economics and Statistics 2 (2020). Verona, Fabio

Category A Peer-reviewed scientific articles
Sub-category A1 Journal article (refereed), original research
auki Internal authors
All authors as text Verona, Fabio 
Number of authors
Status Published
Year of publication 2019 
Date 09.03.2020 
Name of article Investment, Tobin’s Q, and cash flow across time and frequencies 
Name of journal Oxford Bulletin of Economics and Statistics
Volume of issue 82 
Number of issue
Pages 331-346 
Abstract The investment literature has long acknowledged the time- and frequency-varying dynamics of the relationship between investment, Tobin’s Q and cash flow. In this paper, we use continuous wavelet tools to estimate and assess the relationship between these variables simultaneously at different frequencies and over time. We find that i) Q and cash flow are complementary sources of information for investment, the former being more important for firms’ investment decisions in the medium-to-long run and the latter at business cycles frequencies; and ii) investment-Q sensitivity declines over time at all frequencies, while investment-cash flow sensitivity declines at business cycles frequencies but remains largely stable over the medium-to-long run.
Free text descriptor in Finnish investoinnit; suhdanteet 
Free text descriptor in English investment, Tobin’s Q, cash flow, time-frequency estimation, continuous wavelets 
JEL-codes C49, E22, G31 
ISSN / e-ISSN 0305-9049 
auki Internet addresses
Additional information First published: 19 June 2019
Notes BoF DP 26/2017 
Open Access Not known

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