Title: Differences in stock price drivers in case of global manufacturing and servicing companies

Authors: Andras Takacs

Addresses: Faculty of Business and Economics, University of Pecs, Rakoczi Street 80, Pecs 7622, Hungary

Abstract: This study investigates how net asset value per share (size), discounted earnings per share (profit-generating potential), and brand value per share (market acceptance) affect stock prices in case of global manufacturing and non-manufacturing companies. Eight regression models are designed and tested on a database of 132 company years in order to discover potential differences in investor reactions. Test results indicate that the relevance of financial indicators (size and profitability) on the stock price as well as investor reaction times vary for manufacturing and non-manufacturing firms. However, brand value per share, as an indicator of market acceptance, is a significant predictor of the share price for both company types with a relatively short reaction time by investors. These empirical findings may be useful for managers to find out which dimensions of performance should be managed in order to improve the market capitalisation of the firm.

Keywords: financial indicators; net asset value; discounted earnings; brand value; explanatory power; manufacturing companies; non-manufacturing companies.

DOI: 10.1504/IJBEX.2021.119461

International Journal of Business Excellence, 2021 Vol.25 No.3, pp.320 - 333

Received: 18 Jun 2019
Accepted: 07 Sep 2019
Published online: 06 Dec 2021 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article