The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu The leading online blog in the fields of corporate governance and financial regulation. Wed, 03 Jun 2026 20:58:09 +0000 en-US hourly 1 https://wordpress.org/?v=6.5.8 https://corpgov.law.harvard.edu/wp-content/uploads/2024/02/cropped-photography-4-e1706898544564-1-32x32.png The Misuse of Tobin’s Q – The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu 32 32 The Misuse of Tobin’s Q https://corpgov.law.harvard.edu/2018/03/02/the-misuse-of-tobins-q/?utm_source=rss&utm_medium=rss&utm_campaign=the-misuse-of-tobins-q https://corpgov.law.harvard.edu/2018/03/02/the-misuse-of-tobins-q/#comments Fri, 02 Mar 2018 14:09:58 +0000 https://corpgov.law.harvard.edu/?p=105140?d=20180302090958EST Posted by Robert Bartlett (UC Berkeley School of Law) and Frank Partnoy (University of San Diego School of Law), on Friday, March 2, 2018
Editor's Note:

Robert Bartlett is Professor of Law at UC Berkeley School of Law and Frank Partnoy is George E. Barrett Professor of Law and Finance at University of San Diego School of Law. This post is based on their recent paper.

In our paper, The Misuse of Tobin’s Q, which we recently posted to the Social Science Research Network, we examine the common and growing misuse of Tobin’s q as a proxy for firm value within the law and finance literatures.

For several decades, Tobin’s q has been one of the most important concepts in business law and policy for examining how various regulatory and corporate governance provisions affect firm value, and therefore economic welfare. More than three hundred law review articles, including many of the most widely-cited in corporate and securities law, have referenced Tobin’s q as a proxy for firm value, as have hundreds of articles in the most highly-regarded peer-reviewed finance and economics journals. The trend in citations to Tobin’s q is markedly upward, and in 2017 alone, articles in leading law reviews referenced Tobin’s q as a proxy for firm value in analyzing such important topics as how firm value was affected by hedge fund activism, fiduciary duties, staggered boards, and corporate governance.

(more…)

]]> https://corpgov.law.harvard.edu/2018/03/02/the-misuse-of-tobins-q/feed/ 1