We provide an answer to why growth may slow even in the face of technological improvements. Our focus is on the role of intangible assets. Intangible assets are distinct from physical capital in that they are comprised by information that requires a storage medium. A reduction in replication...

Which investment model best fits firm-level data? To answer this question we estimate alternative models using Compustat data. Surprisingly, the two best-performing specifications are based on Hayashi's (1982) model. This model's foremost implication, that Q is a sufficient statistic for...

Tobin's Q exceeds one, even without any adjustment costs, for a firm that earns rents as a result of monopoly power or of decreasing returns to scale in production. Even when there are no adjustment costs and marginal Q is always equal to one, Tobin's Q is informative about the firm's growth...