Asymmetric impact of economic value-added dynamics on market value of stocks in Pakistan stock exchange, a new evidence from panel co-integration, FMOLS and DOLS

Adil Pasha and Muhammad Ramzan

Cogent Business & Management, 2019, vol. 6, issue 1, 1653544

Abstract: Shareholders' wealth maximization is the ultimate objective of firms. Economic value added (EVA) is a financial metric linked to shareholders' wealth maximization. Prior studies revealing the efficacy of value-based and accounting-based performance measures are inconclusive. Moreover, all prior research ignored long-run and short-run co-integration of traditional as well as value-based financial performance measures with share prices. This research found EVA has a negative weak but significant relation with stock return in long run by employing panel co-integration, panel FMOLS and panel DOLS for 70 nonfinancial Pakistan Stock Exchange listed firms from 13 industries for a study period of 2006–2015.

Date: 2019
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DOI: 10.1080/23311975.2019.1653544

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