Do key performance indicators derived from value-based management better predict total stockholder return than traditional performance indicators?

Matthias Olivier () and Roland Wolf ()
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Matthias Olivier: UCAM Universidad Cat?lica de Murcia, Murcia, Spain
Roland Wolf: FOM University of Applied Sciences for Economics and Management, Essen, Germany

Finance, Accounting and Business Analysis, 2025, vol. 7, issue 1, 30-42

Abstract: Purpose: This study investigates whether key performance indicators derived from value-based management are able to better predict total stockholder return than traditional performance indicators. Design/Methodology/Approach: A sample (n = 1388) is drawn from corporate indices in four European countries (France, Germany, Italy, and Spain). The explanatory power of traditional performance indicators and value-based performance indicators is compared with regard to total stockholder return. Findings: It is found that in the sample, value-based performance indicators are not able to better explain total stockholder return than traditional performance indicators. Practical Implications: The results suggest that companies should consider placing greater emphasis on performance indicators, as leveraging both traditional and value-based performance metrics could help improve understanding of stockholder returns and potentially drive more informed strategic decision-making. Originality/Value: The study provides insights into the relative effectiveness of value-based performance indicators versus traditional ones in explaining stockholder return across multiple European countries. Paper Type: Research Paper.

Keywords: Value Based Management; key performance Indicators; Value oriented performance measurement; Value Accounting. (search for similar items in EconPapers)
JEL-codes: G32 H41 (search for similar items in EconPapers)
Date: 2025
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