Comments and Questions

Main indications of the report are regarding the theoretical foundations of the model and its contribution. Some references to recent work are made for comparison.I am willing to provide a revised version taking into account of the indications in the report.In particular, since model is based on traditional theory of investment I would tend to provide more foundations along the traditional investment literature, the literature on asymmetric information, agency and investment and the financial accelerator literature.In turn a more clear description of the paper contribution would be provided. The field is the empirical estimation of investment equations, the paper provides a description of how measurement error can bias estimates in models with q and financing contraints. I realize this is not stated clearly in the present version and that the exposition can be improved.References to more recent literature could be made in the new version, although I usually tend to prefer foundations to articles that address similar issues from different point of departures. I could however have a closer look at the suggested readings before turning a new version of the paper.Finally a response to the other more specific points made could be made in due course.