01118nam a22001697a 4500 190323b xxu||||| |||| 00| 0 eng d 0304-405X The effects of q and cash flow on investment in the presence of measurement error / by Andrew B. Abel Andrew B. Abel Amsterdam Elsevier May 2018 Pages 363-377 Journal of Financial Economics 128 (2) 0304-405X Abstract I analyze investment, q, and cash flow in a tractable stochastic model in which marginal q and average q are identically equal. I introduce classical measurement error and derive closed-form expressions for the coefficients in regressions of investment on q and cash flow. The cash-flow coefficient is positive and larger for faster growing firms, yet there are no financial frictions in the model. I develop the concepts of bivariate attenuation and weight shifting to interpret the estimated coefficients on q and cash flow in the presence of measurement error. Investment Cash flow q Measurement error lcc SE 361357 361357 0 0 lcc 0 CL CL PER 2019-03-23 0 2019-03-23 00:00:00 2019-03-23 SE