I am fascinated by attempts to replace Tobin’s Q as a firm performance metric with Total Q. Both metrics are not fit for purpose. One of the most interesting things is just how terrible the arguments in favor of Total Q as a firm performance metric are. I recently highlighted problems in Du and Osmonbekov‘s “Direct effect of…
Category: Market to Book
Marketing Implications Of Financial Accounting
A book chapter I wrote with Jonathan Knowles and Moeen Butt has recently come out in the Review of Marketing Research (vol 18). In our chapter, we sought to give marketers a better understanding of accounting, specifically financial accounting. What then are the marketing implications of financial accounting? Keeping Score Marketers are trying to work…
What Can The Marketing-Finance Interface Tell Us About Witchcraft Trials?
Edeling, Srinivasan, and Hanssens have a useful new review paper on the Marketing-Finance Interface. The Value Of Review Papers Review papers, such as this, play a vital role in helping frame the field. They give Ph.D. students a way to get up to speed on prior contributions. Review papers also give more seasoned academics a…
Proving The Value Of Marketing
Over the next couple of weeks I will consider ideas from a paper coming out in Marketing Science. [This post was written in 2018]. I wrote the paper with a former PhD student, Moeen Butt. This looks at the use of a metric called Tobin’s q. This has been used in papers claiming to be…
Why Are Intangible Investments Different To Tangible Investments?
Haskel and Westlake’s main point in Capitalism without Capital is that the world is changing and that the predominant form of investment nowadays (investments in intangibles) is different from investment in tangible assets. Why are intangible investments different to tangible investments? The Four Ss of Intangibles The authors, in making the case for intangible investments…
Using The Language Of Business And Seeing Its Problems
Accounting, and finance more generally, is the language of business. This means marketers can’t get away from it. I recommend both using the language of business and seeing its problems. Engaging with Finance Language I think it is extremely valuable for people more broadly to understand the language of finance. Finance and accounting has challenges….
Measuring A Technological Revolution
Some have begun to make the argument that there is a technological revolution. A move towards intangible assets. How does one go about measuring a technological revolution? A Problem With Accounting Corrado and Hulten highlight a major problem in the way accounts are created. This applies to both corporate and national accounts. A basic idea…
Not Real Is Not The Same As Hard To Measure
Haskel and Westlake’s new book, Capitalism without Capital, is on my reading list for the new year. For now I’ll just concentrate on comments made in The Economists’ review of the book. The key point I want to make is that not real is not the same as hard to measure Intangible Assets Are On…
Financial Information And Stock Prices
For the next few weeks I’ll discuss Lev and Gu’s new book on the problems of financial accounting, The End of Accounting. Here the authors discuss financial information and stock prices. Basically, the relevance of accounting information to investment decisions. Financial Information And Stock Prices: Little Connection This book sets out the case that financial accounting…
