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Abstract

Vol. 61, No. 4, pp. 325-341 (2010)

“Heterogeneity of Capital Stock and Multiple q”
Kazumi Asako (Institute of Economic Research, Hitotsubashi University), Konomi Tonogi (Economic and Social Research, Institute, Cabinet Office, Government of Japan, and Graduate Student of Economics, Hitotsubashi University)

By utilizing the panel data on the Japanese listed firms covering 1982-2004, we estimate investment functions within the framework of Tobin's multiple q and test the null hypothesis that capital stocks disaggregated by different usage are homogeneous. We construct the time series data on capital stocks by paying special attention on disinvestment or sales and displacement of old capital. The test result indicates that whether some capital stocks are judged homogeneous with others is not a universal feature, and instead depends on the economic environments firms face. We consider a non-linear adjustment cost function as well and compute the partial q of each capital stock by usage.