The cross-sectional relation of Tobin's q to structural features of firms depends on market conditions. Features such as industry concentration; advertising and research and development intensity; firm specialization; and proxies for the use of specialized resources can operate as barriers to entry or to exit, depending on the direction of expectations. Regressions of q on structural features over periods when the "state of the economy" was clearly different strongly confirm this view. For example, concentration was positively related to q in the mid-1960s but negatively related in the mid-1970s. Coefficients for all structural variables also changed significantly. This implies that structural features must be interpreted as indexes of resources flexibility rather than as sources of stable positive rents. Copyright 1987 by the University of Chicago.