Determinants and consequences of applying value-based performance measures: the German evidence

Jurgen Ernstberger, Florian Egger and Matthias Giebelstein

International Journal of Accounting, Auditing and Performance Evaluation, 2010, vol. 6, issue 2/3, 224-248

Abstract: This paper examines the determinants of applying value-based performance measures like economic value added (EVA) and the impact of applying these measures on firms' returns. Our research design exploits a unique situation in Germany, where a regulatory change requires firms to describe their performance measurement system in their annual report since 2006. Analysing these disclosures, we find that firm size and firm age have a positive impact on the propensity of applying value-based performance measures. In a second analysis, we are not able to document a positive influence of the application of value-based performance measures on firms' performance. However, we find a significant positive association with firm valuation when controlling for self-selection. The paper contributes to the literature, as it is the first to comprehensively investigate the determinants and consequences of applying value-based performance measures.

Keywords: internal performance measurement; returns; value-based performance measures; economic value added; EVA; Germany; German Accounting Standard No. 15; GAS 15; management accounting. (search for similar items in EconPapers)
Date: 2010
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.inderscience.com/link.php?id=31610 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ids:ijaape:v:6:y:2010:i:2/3:p:224-248

Access Statistics for this article

More articles in International Journal of Accounting, Auditing and Performance Evaluation from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().