We consider to what extent the empirical failings of the Q model of investment can be attributed to the use of share prices to measure average q. We show that the usual empirical formulation may fail to identify the Q model when stock market valuations deviate from the present value of expected...

We derive robust predictions on the effects of uncertainty on short run investment dynamics in a broad class of models with (partial) irreversibility. When their environment becomes more uncertain firms become more cautious and less responsive to demand shocks. This result contrasts with the...

In this paper we examine the properties of a simple criterion-based, likelihood ratio type test of parameter restristions for standard GMM estimators in autoregressive panel data models. A comparison is made with recent test proposals based in the continuously-updated GMM criterion (Hansen,...

Cobb Douglas production function parameters are not identified from cross-section variation when inputs are perfectly flexible and chosen optimally, and input prices are common to all firms. We consider the role of adjustment costs for inputs in identifying these parameters in this context. The...

Traditional analysis of the taxation of income from capital has focused on the impact of tax on marginal investment decisions; the principal impact of tax on investment is through the cost of capital, and is generally measured by an effective marginal tax rate. In this paper, we consider cases...

Traditional analysis of the taxation of income from capital has focused on the impact of tax on marginal investment decisions; the principal impact of tax on investment is through the cost of capital, and is generally measured by an effective marginal tax rate. In this paper, we consider cases...

This paper considers the relationship between two general neutral business tax structures, which we label the Ѧirm tax' and the ѳhareholder taxҮ The well-known R-based and S-based cash flow taxes, analysed by Meade (1978), are special cases of these two taxes. We demonstrate the...

There has much recent academic and policy interest in the issue of spatial clustering of economic activity, with most attention paid to the geographic concentration of high-tech industries. This paper describes patterns of geographic and industrial concentration in UK production industries at...

This paper contrasts Samuelson's (1964) definition of "true economic depreciation" with the use of this term that has become standard in the more recent literature on neutral business taxes. Samuelson defined "economic depreciation" to be the change in the economic value of an asset, whilst the...

We present empirical evidence which suggests that a big increase in dividend taxation for UK pension funds in July 1997 affected the form in which some UK companies chose to make dividend payments, but otherwise had limited effects on both the level of dividend payments and the level of...