Impact of Economic Value Added Dynamics on Stock Prices Fact or Fallacy: New Evidence from Nested Panel Analysis
Present scholarship targets to examine the robustness of EVA in Pakistan and information content while controlling prior research ignored firm-specific factors towards excess stock returns. The design of this research used panel data analysis whereby relevant, incremental information content and event analysis of EVA and conventional accounting performance measure via share prices is done by employing nested panel data analysis for 70 non-financial PSX listed companies from 13 industries for a study period of 2006-2015. Against prior research, EVA doesn’t add to the incremental information content of the model. Moreover asymmetric results were revealed using nested and separate regression analysis. This study is aimed to benefit stakeholders in the context of prudent investment choice. This study identifies ROA as the most important financial performance metric for local investor’s decision making. However firm-specific characteristics like financial leverage, liquidity, and firm size also play a pivotal role.
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EVA, Financial Leverage, Firm Size, Liquidity. Traditional Accounting Measures, Stock Returns.
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(1) Malik Adil Pasha
Ph.D. Scholar Department of Management Sciences, Preston University, Islamabad, Pakistan.
(2) Muhammad Ramzan
Associate Professor, Department of Management Sciences, Preston University, Islamabad, Pakistan.
(3) Muhammad Asif
Visiting Faculty,Federal Urdu University of Arts, Science and Technology, Islamabad, Pakistan.
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Cite this article
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APA : Pasha, M. A., Ramzan, M., & Asif, M. (2019). Impact of Economic Value Added Dynamics on Stock Prices Fact or Fallacy: New Evidence from Nested Panel Analysis. Global Social Sciences Review, IV(III), 96-105. https://doi.org/10.31703/gssr.2019(IV-III).13
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CHICAGO : Pasha, Malik Adil, Muhammad Ramzan, and Muhammad Asif. 2019. "Impact of Economic Value Added Dynamics on Stock Prices Fact or Fallacy: New Evidence from Nested Panel Analysis." Global Social Sciences Review, IV (III): 96-105 doi: 10.31703/gssr.2019(IV-III).13
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HARVARD : PASHA, M. A., RAMZAN, M. & ASIF, M. 2019. Impact of Economic Value Added Dynamics on Stock Prices Fact or Fallacy: New Evidence from Nested Panel Analysis. Global Social Sciences Review, IV, 96-105.
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MHRA : Pasha, Malik Adil, Muhammad Ramzan, and Muhammad Asif. 2019. "Impact of Economic Value Added Dynamics on Stock Prices Fact or Fallacy: New Evidence from Nested Panel Analysis." Global Social Sciences Review, IV: 96-105
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MLA : Pasha, Malik Adil, Muhammad Ramzan, and Muhammad Asif. "Impact of Economic Value Added Dynamics on Stock Prices Fact or Fallacy: New Evidence from Nested Panel Analysis." Global Social Sciences Review, IV.III (2019): 96-105 Print.
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OXFORD : Pasha, Malik Adil, Ramzan, Muhammad, and Asif, Muhammad (2019), "Impact of Economic Value Added Dynamics on Stock Prices Fact or Fallacy: New Evidence from Nested Panel Analysis", Global Social Sciences Review, IV (III), 96-105
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TURABIAN : Pasha, Malik Adil, Muhammad Ramzan, and Muhammad Asif. "Impact of Economic Value Added Dynamics on Stock Prices Fact or Fallacy: New Evidence from Nested Panel Analysis." Global Social Sciences Review IV, no. III (2019): 96-105. https://doi.org/10.31703/gssr.2019(IV-III).13