IMPACT OF ECONOMIC VALUE ADDED DYNAMICS ON STOCK PRICES FACT OR FALLACY NEW EVIDENCE FROM NESTED PANEL ANALYSIS

http://dx.doi.org/10.31703/gssr.2019(IV-III).13      10.31703/gssr.2019(IV-III).13      Published : Sep 3
Authored by : MalikAdilPasha , MuhammadRamzan , MuhammadAsif

13 Pages : 96-105

References

  • Abuzayed, B. (2012). Working capital management and firms' performance in emerging markets: the case of Jordan. International Journal of Managerial Finance, 8(2), 155-179. https://doi.org/10.1108/17439131211216620
  • Altaf, N. (2016). Economic value added or earnings: What explains market value in Indian firms? Future Business Journal, 2(2), 152-166. https://doi.org/10.1016/j.fbj.2016.11.001
  • Arshad Haroon, M. (2012). Testing the Weak Form Efficiency of Karachi Stock Exchange. Pakistan Journal of Commerce & Social Sciences, 6(2), 297-307.
  • Banz, R. W. (1981). The relationship between return and market value of common stocks. Journal of Financial Economics, 9(1), 3-18. https://doi.org/10.1016/0304-405X(81)90018-0
  • Bao, B.-H., & Bao, D.-H. (1998). Usefulness of Value Added and Abnormal Economic Economic Earnings: An Empirical Examination. Journal of Business Finance
  • Biddle, G. C., Bowen, R. M., & Wallace, J. S. (1997). Does EVA® beat earnings? Evidence on associations with stock returns and firm values. Journal of Accounting and Economics, 24(3), 301-336.
  • Burton, R. M., Lauridsen, J., & Obel, B. (2002). Return on Assets Loss from Situational and Contingency Misfits. Management Science, 48(11), 1461-1485. https://doi.org/10.1287/mnsc.48.11.1461.262
  • Chen, S., & Dodd, J. L. (1997). Economic Value Added (EVATM): An Empirical Examination Of A New Corporate Performance Measure. Journal of Managerial Issues, 9(3), 318-333.
  • Fama, E. F., & French, K. R. (1995). Size and book‐to‐market factors in earnings and returns. The Journal of Finance, 50(1), 131-155.
  • Ferguson, R., Rentzler, J., & Yu, S. (2005). Does Economic Value Added (EVA) Improve Stock Performance Profitability? Journal of Applied Finance, (FALL/WINTER 2005), 101-113.
  • Giroud, X., Mueller, H. M., Stomper, A., & Westerkamp, A. (2012). Snow and Leverage. Review of Financial Studies, 25(3), 680-710. https://doi.org/10.1093/rfs/hhr113
  • Hamada, R. S. (1972). The Effect Of The Firm's Capital Structure On The Systematic Risk Of Common Stocks. The Journal of Finance, 27(2), 435-452. https://doi.org/10.1111/j.1540-6261.1972.tb00971.x
  • Hansen, & Mowen., D. R. M. M. (1997). Management Accounting. Cincinnati Ohio. South-Western Publishing Co.
  • Henry Kimathi, M. (2015). Effect of Leverage on Performance of Non-financial Firms Listed at the Nairobi Securities Exchange. Journal of Finance and Accounting, 3(5), 132-139. https://doi.org/10.11648/j.jfa.20150305.14
  • Ismail, A. (2006). Is economic value added more associated with stock return than accounting earnings? The UK evidence. International Journal of Managerial Finance, 2(4), 343-353. https://doi.org/10.1108/17439130610705526
  • Jensen, M. C. (1986). Agency costs of free cash flow, corporate finance, and takeovers. The American Economic Review, 76(2), 323-329.
  • Khan, U. A., Aleemi, A. R., & Qureshi, M. A. (2016). Is Economic Value Added More Associated with Stock Price than Accounting Earnings? Evidence from Pakistan. City University Research Journal, 6(2), 204- 216.
  • Kraus, A., & Litzenberger, R. H. (1973). A State-Preference Model Of Optimal Financial Leverage. The Journal of Finance, 28(4), 911-922. https://doi.org/10.1111/j.1540-6261.1973.tb01415.x
  • Kumar, S., & Sharma, A. K. (2011). Association of EVA and accounting earnings with market value: evidence from India. Asia-Pacific Journal of Business Administration, 3(2), 83-96. https://doi.org/10.1108/17574321111169795
  • Lakonishok, J., Shleifer, A., & Vishny, R. W. (1994). Contrarian investment, extrapolation, and risk. The Journal of Finance, 49(5), 1541-1578.
  • Li, L., & Zhu, B. (2015). Family involvement, firm size, and performance of private-owned enterprises. The Journal of Chinese Sociology, 2(1), 2-18. https://doi.org/10.1186/s40711-015-0013-y
  • Merton, R. C. (1987). A simple model of capital market equilibrium with incomplete information. The Journal of Finance, 42(3), 483-510.
  • Modigliani, F., & Miller, M. H. (1958). The Cost of Capital, Corporation Finance and the Theory of Investment. The American Economic Review, 48(3), 261-297.
  • Myers, S. C., & Majluf, N. S. (1984). Corporate financing and investment decisions when firms have information that investors do not have. Journal of Financial Economics, 13(2), 187-221.
  • Nakhaei, H. (2013). The Relationship between Economic Value Added, Return on Assets, and Return on Equity with Market Value Added in Tehran Stock Exchange (TSE). 34(4), 1-9
  • Padachi, K. (2006). Trends in Working Capital Management and its Impact on Firms' Performance: An Analysis of Mauritian Small Manufacturing Firms. International Review of Business Research Papers, 2(2), 45- 58.
  • Paulson, A. L., & Townsend, R. (2004). Entrepreneurship and financial constraints in Thailand. Journal of Corporate Finance, 10(2), 229-262. https://doi.org/10.1016/S0929-1199(03)00056-7
  • Reinganum, M. R. (1981). Misspecification of capital asset pricing: Empirical anomalies based on earnings' yields and market values. Journal of Financial Economics, 9(1), 19-46.
  • Sharma, A. K., & Kumar, S. (2010). Economic Value Added (EVA) - Literature Review and Relevant Issues. International Journal of Economics and Finance, 2(2). https://doi.org/10.5539/ijef.v2n2p200
  • Siddique, K., & Sarwar, G. (2014). The Effect Of Economic Value Added On Stock Return: Evidence From Selected Companies Of Karachi Stock Exchange. Research Journal of Finance and Accounting, 14.
  • Stern, J. M., Stewart, G. B., & Chew, D. H. (1995). The Evar Financial Management System. Journal of Applied Corporate Finance, 8(2), 32-46. https://doi.org/10.1111/j.1745-6622.1995.tb00285.x
  • Suleman, M. T., Hamid, K., Ali Shah, S. Z., Akkash, I., & Shahid, R. (2010). Testing the weak form of efficient market hypothesis: Empirical evidence from Asia-Pacific Markets. International Research Journal of Finance and Economics, (58), 121-133.
  • Warrad, L., & Box, P. O. (2015). The Impact of Liquidity on Jordanian Banks Profitability through Return on Assets. Research Journal of Finance and Accounting, 6(5), 26-29.
  • Worthington, A. C., & West, T. (2004). Australian Evidence Concerning the Information Content of Economic Value-Added. Australian Journal of Management, 29(2), 201-223. https://doi.org/10.1177/031289620402900204

References

  • Abuzayed, B. (2012). Working capital management and firms' performance in emerging markets: the case of Jordan. International Journal of Managerial Finance, 8(2), 155-179. https://doi.org/10.1108/17439131211216620
  • Altaf, N. (2016). Economic value added or earnings: What explains market value in Indian firms? Future Business Journal, 2(2), 152-166. https://doi.org/10.1016/j.fbj.2016.11.001
  • Arshad Haroon, M. (2012). Testing the Weak Form Efficiency of Karachi Stock Exchange. Pakistan Journal of Commerce & Social Sciences, 6(2), 297-307.
  • Banz, R. W. (1981). The relationship between return and market value of common stocks. Journal of Financial Economics, 9(1), 3-18. https://doi.org/10.1016/0304-405X(81)90018-0
  • Bao, B.-H., & Bao, D.-H. (1998). Usefulness of Value Added and Abnormal Economic Economic Earnings: An Empirical Examination. Journal of Business Finance
  • Biddle, G. C., Bowen, R. M., & Wallace, J. S. (1997). Does EVA® beat earnings? Evidence on associations with stock returns and firm values. Journal of Accounting and Economics, 24(3), 301-336.
  • Burton, R. M., Lauridsen, J., & Obel, B. (2002). Return on Assets Loss from Situational and Contingency Misfits. Management Science, 48(11), 1461-1485. https://doi.org/10.1287/mnsc.48.11.1461.262
  • Chen, S., & Dodd, J. L. (1997). Economic Value Added (EVATM): An Empirical Examination Of A New Corporate Performance Measure. Journal of Managerial Issues, 9(3), 318-333.
  • Fama, E. F., & French, K. R. (1995). Size and book‐to‐market factors in earnings and returns. The Journal of Finance, 50(1), 131-155.
  • Ferguson, R., Rentzler, J., & Yu, S. (2005). Does Economic Value Added (EVA) Improve Stock Performance Profitability? Journal of Applied Finance, (FALL/WINTER 2005), 101-113.
  • Giroud, X., Mueller, H. M., Stomper, A., & Westerkamp, A. (2012). Snow and Leverage. Review of Financial Studies, 25(3), 680-710. https://doi.org/10.1093/rfs/hhr113
  • Hamada, R. S. (1972). The Effect Of The Firm's Capital Structure On The Systematic Risk Of Common Stocks. The Journal of Finance, 27(2), 435-452. https://doi.org/10.1111/j.1540-6261.1972.tb00971.x
  • Hansen, & Mowen., D. R. M. M. (1997). Management Accounting. Cincinnati Ohio. South-Western Publishing Co.
  • Henry Kimathi, M. (2015). Effect of Leverage on Performance of Non-financial Firms Listed at the Nairobi Securities Exchange. Journal of Finance and Accounting, 3(5), 132-139. https://doi.org/10.11648/j.jfa.20150305.14
  • Ismail, A. (2006). Is economic value added more associated with stock return than accounting earnings? The UK evidence. International Journal of Managerial Finance, 2(4), 343-353. https://doi.org/10.1108/17439130610705526
  • Jensen, M. C. (1986). Agency costs of free cash flow, corporate finance, and takeovers. The American Economic Review, 76(2), 323-329.
  • Khan, U. A., Aleemi, A. R., & Qureshi, M. A. (2016). Is Economic Value Added More Associated with Stock Price than Accounting Earnings? Evidence from Pakistan. City University Research Journal, 6(2), 204- 216.
  • Kraus, A., & Litzenberger, R. H. (1973). A State-Preference Model Of Optimal Financial Leverage. The Journal of Finance, 28(4), 911-922. https://doi.org/10.1111/j.1540-6261.1973.tb01415.x
  • Kumar, S., & Sharma, A. K. (2011). Association of EVA and accounting earnings with market value: evidence from India. Asia-Pacific Journal of Business Administration, 3(2), 83-96. https://doi.org/10.1108/17574321111169795
  • Lakonishok, J., Shleifer, A., & Vishny, R. W. (1994). Contrarian investment, extrapolation, and risk. The Journal of Finance, 49(5), 1541-1578.
  • Li, L., & Zhu, B. (2015). Family involvement, firm size, and performance of private-owned enterprises. The Journal of Chinese Sociology, 2(1), 2-18. https://doi.org/10.1186/s40711-015-0013-y
  • Merton, R. C. (1987). A simple model of capital market equilibrium with incomplete information. The Journal of Finance, 42(3), 483-510.
  • Modigliani, F., & Miller, M. H. (1958). The Cost of Capital, Corporation Finance and the Theory of Investment. The American Economic Review, 48(3), 261-297.
  • Myers, S. C., & Majluf, N. S. (1984). Corporate financing and investment decisions when firms have information that investors do not have. Journal of Financial Economics, 13(2), 187-221.
  • Nakhaei, H. (2013). The Relationship between Economic Value Added, Return on Assets, and Return on Equity with Market Value Added in Tehran Stock Exchange (TSE). 34(4), 1-9
  • Padachi, K. (2006). Trends in Working Capital Management and its Impact on Firms' Performance: An Analysis of Mauritian Small Manufacturing Firms. International Review of Business Research Papers, 2(2), 45- 58.
  • Paulson, A. L., & Townsend, R. (2004). Entrepreneurship and financial constraints in Thailand. Journal of Corporate Finance, 10(2), 229-262. https://doi.org/10.1016/S0929-1199(03)00056-7
  • Reinganum, M. R. (1981). Misspecification of capital asset pricing: Empirical anomalies based on earnings' yields and market values. Journal of Financial Economics, 9(1), 19-46.
  • Sharma, A. K., & Kumar, S. (2010). Economic Value Added (EVA) - Literature Review and Relevant Issues. International Journal of Economics and Finance, 2(2). https://doi.org/10.5539/ijef.v2n2p200
  • Siddique, K., & Sarwar, G. (2014). The Effect Of Economic Value Added On Stock Return: Evidence From Selected Companies Of Karachi Stock Exchange. Research Journal of Finance and Accounting, 14.
  • Stern, J. M., Stewart, G. B., & Chew, D. H. (1995). The Evar Financial Management System. Journal of Applied Corporate Finance, 8(2), 32-46. https://doi.org/10.1111/j.1745-6622.1995.tb00285.x
  • Suleman, M. T., Hamid, K., Ali Shah, S. Z., Akkash, I., & Shahid, R. (2010). Testing the weak form of efficient market hypothesis: Empirical evidence from Asia-Pacific Markets. International Research Journal of Finance and Economics, (58), 121-133.
  • Warrad, L., & Box, P. O. (2015). The Impact of Liquidity on Jordanian Banks Profitability through Return on Assets. Research Journal of Finance and Accounting, 6(5), 26-29.
  • Worthington, A. C., & West, T. (2004). Australian Evidence Concerning the Information Content of Economic Value-Added. Australian Journal of Management, 29(2), 201-223. https://doi.org/10.1177/031289620402900204

Cite this article

APA

    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

CHICAGO

    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

HARVARD

    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.

MHRA

    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

MLA

    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.

OXFORD

    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

TURABIAN

    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