Title: Performance measures: traditional accounting measures vs. modern value-based measures. The case of earnings and EVA® in the Athens Stock Exchange (ASE)
Authors: Dimitrios I. Maditinos, Zeljko Sevic, Nikolaos G. Theriou
Addresses: Kavala Institute of Technology, Department of Business Administration, School of Business and Economics, Agios Loukas 65404, Kavala, Greece. ' Division of Accounting, Finance and Risk, Caledonian Business School, Glasgow Caledonian University, Cowcaddens Road, Glasgow G4 0BA, UK. ' Kavala Institute of Technology, Department of Business Administration, School of Business and Economics, Agios Loukas 654 04, Kavala, Greece
Abstract: This study is stimulated by both the EVA ® proponents| assertions and by the mixed empirical results for its value relevance reported until now. Pooled time-series, cross sectional data of listed companies in the Athens Stock Exchange (ASE) over the period 1992-2001 have been employed to examine whether EVA ® or the traditional accounting-based measures are associated more strongly with stock returns. Relative information content tests reveal that stock returns are more closely associated with earnings per share than with EVA ®. However, incremental information content tests suggest that EVA ® adds considerable explanatory power to earnings per share.
Keywords: traditional accounting performance measures; EPS; ROI; ROE; modern value based performance measures; EVA; economic value added; SVA; shareholder value added; ASE; Athens Stock Exchange; Greece; stock returns; earnings per share.
International Journal of Economic Policy in Emerging Economies, 2009 Vol.2 No.4, pp.323 - 334
Published online: 13 Jan 2010 *Full-text access for editors Access for subscribers Purchase this article Comment on this article