Tobin’s Q and its Determinants: A study on Huawei Technologies Co., Ltd

Yik Fen, Yvonne P'ng (2019): Tobin’s Q and its Determinants: A study on Huawei Technologies Co., Ltd.

Abstract

Tobin’s Q can be affected by both the internal and external factors. Tobin’s Q is a company’s performances indicator, so it is important for an organization to manage its effectively. This study aims to investigate the impact of Tobin’s Q in relation with firm-specific factors and macroeconomics factors towards the performance of the selected company which is Huawei Technologies Co., Ltd. Multiple regression analysis of financial ratios of the company is conducted for the year from 2011 to 2015. The findings and analysis indicate that firm-specific factor (Return on equity, ROE) have a greater influence on Tobin’s Q of the company as compared to macroeconomic factors. This study is also suggested that the company should improve the ROE, the company is advised to increase its debt with a suitable amount. By having the cash flows in, the company can purchase new assets to generate profit. Even through the macroeconomics factors have a little impact in Tobin’s Q, the company still requires in sustaining its growth along the economy conditions by somehow.

• Item Type: MPRA Paper
• Language: English
• Keywords: Tobin’s Q, Firm-Specific Factors, Macroeconomics Factors, Return on Equity.
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O16 - Financial Markets ; Saving and Capital Investment ; Corporate Finance and Governance

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