Economic value added and traditional accounting measures for shareholder’s wealth creation

This paper investigated performance measurement tools and shareholder’s wealth relationships in the context of Malaysian public listed construction companies. Conventional measures are still utilized by many Malaysian listed companies even though it has been criticized by many researchers. Both trad...

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Main Author:	Shrikant Krupasindhu Panigrahi
Format:	Article
Language:	English
Published:	Penerbit Universiti Kebangsaan Malaysia 2017
Online Access:	http://journalarticle.ukm.my/11972/ http://journalarticle.ukm.my/11972/ http://journalarticle.ukm.my/11972/1/10422-62491-1-PB.pdf

id	ukm-11972
recordtype	eprints
spelling	ukm-119722018-07-31T09:11:54Z http://journalarticle.ukm.my/11972/ Economic value added and traditional accounting measures for shareholder’s wealth creation Shrikant Krupasindhu Panigrahi, This paper investigated performance measurement tools and shareholder’s wealth relationships in the context of Malaysian public listed construction companies. Conventional measures are still utilized by many Malaysian listed companies even though it has been criticized by many researchers. Both traditional accounting measures and economic measures fail to reflect a company’s true value due to the lack of long-term sustainability of a business. The study used panel data analysis techniques, particularly Error Correction Models (ECM) to test the relationship of error terms and panel Ordinary Least Square (OLS) regression to test the hypothesis. Panel data comprised of 280 observations over the period of 2003-2012 indicates that shareholder value is a function of performance measures. The results conclusively support the claims made by previous studies on the role of earnings per share, economic value added (EVA) and dividend payout ratio; and further support the potential usefulness of the performance metric for internal and external performance. Furthermore, market value added (MVA) is found to have a negative relationship with created shareholder value (CSV) contradicting with the theory that confirmed, the increase in shareholder value when there is an increase in stock market value and efficiency. Penerbit Universiti Kebangsaan Malaysia 2017 Article PeerReviewed application/pdf en http://journalarticle.ukm.my/11972/1/10422-62491-1-PB.pdf Shrikant Krupasindhu Panigrahi, (2017) Economic value added and traditional accounting measures for shareholder’s wealth creation. Asian Journal of Accounting and Governance, 8 . pp. 125-136. ISSN 2180-3838 http://ejournal.ukm.my/ajac/issue/view/1033
repository_type	Digital Repository
institution_category	Local University
institution	Universiti Kebangasaan Malaysia
building	UKM Institutional Repository
collection	Online Access
language	English
description	This paper investigated performance measurement tools and shareholder’s wealth relationships in the context of Malaysian public listed construction companies. Conventional measures are still utilized by many Malaysian listed companies even though it has been criticized by many researchers. Both traditional accounting measures and economic measures fail to reflect a company’s true value due to the lack of long-term sustainability of a business. The study used panel data analysis techniques, particularly Error Correction Models (ECM) to test the relationship of error terms and panel Ordinary Least Square (OLS) regression to test the hypothesis. Panel data comprised of 280 observations over the period of 2003-2012 indicates that shareholder value is a function of performance measures. The results conclusively support the claims made by previous studies on the role of earnings per share, economic value added (EVA) and dividend payout ratio; and further support the potential usefulness of the performance metric for internal and external performance. Furthermore, market value added (MVA) is found to have a negative relationship with created shareholder value (CSV) contradicting with the theory that confirmed, the increase in shareholder value when there is an increase in stock market value and efficiency.
format	Article
author	Shrikant Krupasindhu Panigrahi,
spellingShingle	Shrikant Krupasindhu Panigrahi, Economic value added and traditional accounting measures for shareholder’s wealth creation
author_facet	Shrikant Krupasindhu Panigrahi,
author_sort	Shrikant Krupasindhu Panigrahi,
title	Economic value added and traditional accounting measures for shareholder’s wealth creation
title_short	Economic value added and traditional accounting measures for shareholder’s wealth creation
title_full	Economic value added and traditional accounting measures for shareholder’s wealth creation
title_fullStr	Economic value added and traditional accounting measures for shareholder’s wealth creation
title_full_unstemmed	Economic value added and traditional accounting measures for shareholder’s wealth creation
title_sort	economic value added and traditional accounting measures for shareholder’s wealth creation
publisher	Penerbit Universiti Kebangsaan Malaysia
publishDate	2017
url	http://journalarticle.ukm.my/11972/ http://journalarticle.ukm.my/11972/ http://journalarticle.ukm.my/11972/1/10422-62491-1-PB.pdf
first_indexed	2023-09-18T20:01:34Z
last_indexed	2023-09-18T20:01:34Z
_version_	1777406883059990528

Economic value added and traditional accounting measures for shareholder’s wealth creation

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