quarters of the variation in real annual aggregate investment growth between 1948 and 1993. The negative correlation of … contemporaneous investment and stock returns is explained by the negative correlation of planned investment and subsequent stock … returns. Unexpected revisions to aggregate investment (actual minus plan) within a year are essentially unrelated to current …

This paper explores the sources of uncertainty that cause firms to revise their capital investment plans and the stock … in investment plans and the stock market rate of return in micro, setoral and aggregate components, and to measure the … U.S. economy for the period 1950-1973. The empirical results show that the capital investment decision is governed …

firm characteristics - Tobin's Q, past investment, earnings-price ratios, market betas, and idiosyncratic volatility of … returns by aggregate investment and valuation ratios; and v) a downward sloping term structure of risk premia for dividend … strips. Our model delivers testable predictions about the behavior of firm-level real variables - investment and output …

, profitability, investment, and stock returns for firms in the 'crisis' country as well as competitors in the rest of the world … capital investment and stock returns (and therefore expected long-run output and profits) is determined by capital …

negative abnormal capital investment/return relation is shown to be stronger for firms that have greater investment discretion … to the empire building implications of increased investment expenditures. Although firms that increase capital … investments tend to have high past returns and often issue equity, the negative abnormal capital investment/return relation is …

Should managers, when making investment decisions, follow the signals given by the stock market even if those do not …;fundamentalsquot; and quot;valuationquot;, the ratio of market value to fundamentals. We then examine the relation of investment to each of … overwhelmingly, to a larger role of quot;fundamentalsquot; than of quot;valuationquot; in investment decisions …

We develop a model of investment with financial constraints and use it to investigate the relation between investment … between q and investment, relative to the frictionless benchmark. We present a calibrated version of the model, which, due to … this effect, generates realistic correlations between investment, q, and cash flow …