Research On The Relationship Between Investment And Tobin Q

In recent years,Tobin's Q investment theory has been widely used in evaluating company performance,growth,and company's M&A performance and management efficiency.People often use Tobin's Q as a proxy variable to measure corporate investment,but there is a great deal of controversy in studying the relation of Tobin's Q to the enterprise investment.In the previous articles,few people studied the relationship between Tobin's Q and investment from the perspective of circulation ratio.After the non-tradable share reform in 2005,non-tradable shares were converted into tradable shares,and they flooded into China's stock market.As a result,the proportion of tradable shares in China's enterprises increased substantially,and the stock price also changed,which effect on the investment decisions for compaines.Then,will the increase in the proportion of China's corporate tradable shares affect corporate investment? In today's world,the era of industrial economy has ended,the world has entered the era of knowledge-based economy,and the proportion of intangible assets has been increasing.It has become an important part of corporate investment,then in the case of circulating stocks influx into the stock market,what will happen when we focus on tangible assets investment and intangible assets investment? From the perspective of the ratio of circulating shares,this article takes the Shanghai and Shenzhen stock markets as an example,selects financial data and stock data of listed companies in China from 2005 to 2016,and uses Tobin's Q value as a proxy variable to measure stock market valuation,and uses cash flow as a control variable.First,the regression model was used to examine the relationship between Tobin's Q value and corporate investment,and to test whether Tobin's Q value would affect our company's investment,and whether Tobin's Q investment in business is significant.Secondly,from the perspective of the ratio of tradable shares,the proportion of tradable shares is divided into three groups of less than or equal to 30%;greater than 30%,less than or equal to 70%;and greater than 70%,and a regression analysis is performed on Tobin's Q and corporate investments.Then it is divided into intangible assets and tangible assets in accordance with the form of the assets.Regression analysis is conducted on intangible assets investment and tangible assets investment in the case of the proportion of circulating shares.Finally,according to the above research results,combined with China's unique economic background,it proposes investment decision-making for the enterprise,so that the company's resources can be optimally configured and the value of the enterprise can be maximized.After the empirical test,we find that there is a positive correlation between Tobin's Q and corporate investment,and it is very significant;the increase in the proportion of tradable shares can promote the investment of the company,and the results of the study are appricable to the total assets investment,intangible assets investment and tangible assets investment.Under the same proportion of outstanding shares,Tobin's Q has greater influence on the investment of intangible assets than on the investment of tangible assets.