Title: What explains the lagged investment effect?
Description: "The best predictor of current investment at the firm level is lagged investment.  This lagged-investment effect is empirically more important than the cash-flow and Q effects combined.  We show that the specification of investment adjustment costs proposed by Christiano, Eichenbaum and Evans (2005) predicts the presence of a lagged-investment effect and that a generalized version of their model is consistent with the behavior of firm-level data from Compustat"--National Bureau of Economic Research web site.