International Journal of Business and Economics

International Journal of Business and Economics
Volume 9, No. 1

April​, 2010
An Alternative Perspective on Tobin's Q and Aggregate Investment Expenditure
Mark J. Holmes
Department of Economics, Waikato University, New Zealand
This study provides new evidence on the relationship between Tobin's Q and private investment. Using a testing procedure advocated by Bierens applied to US data, both series are found to be stationary around a nonlinear deterministic trend and are co-trended insofar as they share a common nonlinear deterministic trend.
Keywords:Tobin's Q, investment, nonlinear trend, co-trend.
JEL Classifications:E2, C2, C3.