The Impact of Leverages and Operating Efficiency on Market Value Added: Empirical Evidence from India

Rahul Kumar, Prince Bhatia and Subir Chattopadhyay

Vision, 2022, vol. 26, issue 3, 351-360

Abstract: This article examines the relationship between the market value added and degree financial leverage, degree of operating leverage, and asset turnover ratio of the listed firms in India. The period of study was from 2013 to 2019, and data were collected in annual frequency. Our study concludes that the degree of financial leverage and asset turnover ratio are significantly and negatively associated with the market value added of listed firms in India. We also reported an insignificant relationship between market value added and degree of operating leverage. Our results indicate that promoters holding and firm size are important factors driving the performance of the firms listed in India.

Keywords: Market Value Added (MVA); Degree Operating Leverage; Degree of Financial Leverage (DFL); Asset Turnover Ratio; Generalized Methods of Moments (GMM) (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:sae:vision:v:26:y:2022:i:3:p:351-360

DOI: 10.1177/0972262921992152

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