The Q theory of investment: does uncertainty matter

This paper includes uncertainty in the Q-model of investment. A structural Q-type investment model is derived, which contains the information on uncertainty effects of random variables that affect the future profitability of a firm. We use a panel of 82 Dutch firms to test whether the presence of uncertainty affects the performance of the Q-model. Our evidence shows that the volatility of profits and the volatility of the interest rate influence investment apart from Q. Moreover, the presence of uncertainty factors changes the structural parameters of the Q-model of investment. The results suggest that the unsatisfactory empirical performance of the standard Q-model of investment may be due to the omission of uncertainty considerations. In addition, Dutch firm-level evidence shows that severe uncertainty effects are associated with small firms and highly indebted firms, which are more likely to be in financial distress. This provides indirect evidence that the wedge between external financing and internal financing aggravates the effect of uncertainty on investment.

Uncertainty and investment of Dutch firms: an empirical analysis using stock market data

This paper examines the investment-uncertainty relationship for a panel of Dutch firms. The uncertainty proxy is derived from daily stock market prices of individual firms. We show that some macro indicators, in combination with firm fixed effects, are able to give a reasonable explanation of the uncertainty a firm is faced with, and hence can be used to extract the exogenous component of uncertainty. The investment-uncertainty relationship appears to be non-linear: for low levels of uncertainty there is a positive effect on investment, whereas for high levels of uncertainty the effect becomes negative.

Analysis of the Chinese provincial air transportation network

The air transportation system is of a great impact on the economy and globalization of a country. In this paper, we analyze the Chinese air transportation network (ATN) from a provincial perspective via the complex network framework, where all airports located in one province are abstracted as a single node and flights between two provinces are denoted by a link. The results show that the network exhibits small-world property, homogeneous structure and disassortative mixing. The variation of the flight flow within 24 h is investigated and an obvious tide phenomenon is found in the dynamics of Chinese provincial ATN for high output level of tertiary industry. Our work will offer a novel approach for understanding the characteristic of the Chinese air transportation network.Peer ReviewedPostprint (author's final draft

Coadjoint orbit of the virasoro group and the index theorem on Diff S1/S1

Abstract We use the methods of coadjoint orbits and the corresponding representations of the Virasoro group to formulate an index theorem for the BRST operator. A few concrete examples are set forth, one of them implies the vanishing theorem of Frenkel, Garland and Zukerman