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:	Panigrahi, Shrikant
Format:	Article
Language:	English
Published:	Universiti Kebangsaan Malaysia 2017
Subjects:	HF Commerce
Online Access:	http://umpir.ump.edu.my/id/eprint/19493/ http://umpir.ump.edu.my/id/eprint/19493/ http://umpir.ump.edu.my/id/eprint/19493/ http://umpir.ump.edu.my/id/eprint/19493/1/fim-2017-shrikant-Economic%20Value%20Added%20and%20Traditional.pdf

id	ump-19493
recordtype	eprints
spelling	ump-194932018-08-29T04:47:31Z http://umpir.ump.edu.my/id/eprint/19493/ Economic Value Added and Traditional Accounting Measures for Shareholder’s Wealth Creation Panigrahi, Shrikant HF Commerce 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 Universiti Kebangsaan Malaysia 2017 Article PeerReviewed application/pdf en http://umpir.ump.edu.my/id/eprint/19493/1/fim-2017-shrikant-Economic%20Value%20Added%20and%20Traditional.pdf Panigrahi, Shrikant (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://ejournals.ukm.my/ajac/article/view/10422 DOI: http://dx.doi.org/10.17576/AJAG-2017-08-11
repository_type	Digital Repository
institution_category	Local University
institution	Universiti Malaysia Pahang
building	UMP Institutional Repository
collection	Online Access
language	English
topic	HF Commerce
spellingShingle	HF Commerce Panigrahi, Shrikant Economic Value Added and Traditional Accounting Measures for Shareholder’s Wealth Creation
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	Panigrahi, Shrikant
author_facet	Panigrahi, Shrikant
author_sort	Panigrahi, Shrikant
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	Universiti Kebangsaan Malaysia
publishDate	2017
url	http://umpir.ump.edu.my/id/eprint/19493/ http://umpir.ump.edu.my/id/eprint/19493/ http://umpir.ump.edu.my/id/eprint/19493/ http://umpir.ump.edu.my/id/eprint/19493/1/fim-2017-shrikant-Economic%20Value%20Added%20and%20Traditional.pdf
first_indexed	2023-09-18T22:27:50Z
last_indexed	2023-09-18T22:27:50Z
_version_	1777416085321023488

Economic Value Added and Traditional Accounting Measures for Shareholder’s Wealth Creation

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