The trouble with Q

Abstract

Q theory predicts not just an absolute increase in new investment during stock market booms but a relative increase compared to buying companies on the stock market and a relative decline in new investment expenditures compared to buying companies on the stock market during a stock market decline. The facts concerning the ratio of new investment to mergers and acquisitions not only do not corroborate Q theory but would constitute strong evidence for any theory that would predict the exact opposite of what Q theory predicts.MERGERS AND ACQUISITIONS, TOBIN'S Q.,