On this episode of Deans Counsel, moderators Ken Kring and Dave Ikenberry speak with Executive Vice President and Provost Rachel T.A. Croson, the chief academic officer of the University of Minnesota multi-campus system and provost for the Twin Cities campus, with overarching responsibility for fostering the academic excellence of the educational and research missions of […]
Archives for August 2024
Excess Capacity, Marginal q, and Corporate Investment
Theory posits that when managers anticipate excess capacity, average q becomes a biased estimator of marginal q as the potential for underutilizing new capital diminishes the marginal benefit of investing. After correcting for this source of measurement error, the explanatory power of Tobin’s q model substantially improves in time-series and cross-sectional regressions as well as […]