![Open Access](https://i-scholar.in/lib/pkp/templates/images/icons/fulltextgreen.png)
![Restricted Access](https://i-scholar.in/lib/pkp/templates/images/icons/fulltextred.png)
![Open Access](https://i-scholar.in/lib/pkp/templates/images/icons/fulltextgreen.png)
![Open Access](https://i-scholar.in/lib/pkp/templates/images/icons/fulltext_open_medium.gif)
![Restricted Access](https://i-scholar.in/lib/pkp/templates/images/icons/fulltextred.png)
![Restricted Access](https://i-scholar.in/lib/pkp/templates/images/icons/fulltext_restricted_medium.gif)
Performance Appraisal with EVA, MVA and Other Performance Measures
Subscribe/Renew Journal
The present paper aims to analyze and evaluate the effects of Economic Value Added, Market Value Added and other performance variables on returns of banks in India. The empirical data for the study is drawn from a panel of 28 public and private sector banks for a ten year period of 2002-03 to 2011-12. Correlation and various Regression models have been applied to test the hypotheses of the present study. The results reveal that Economic Value Added is positively and significantly associated with return on equity and return on assets. Further, Market Value Added is found significantly positive to return on assets but positively insignificant to return on equity. It is also observed that NIM and NII are the two important performance variables of Indian banks which significantly influence the both returns i.e. ROA and ROE. A significant positive relationship of ROE with EVA and an insignificant positive association of ROE with MVA state that shareholders give more importance to economic value than the market value of banks in India.
Keywords
Economic Value Added, Market Value Added, Fixed Effect, Random Effect, Banking Sector, India.
User
Information
- Athanassakos, G. (2007), Value-based Management, EVA and Stock Price Performance in Canada, Journal of Managerial Decisions, 45(9): 1397–1411.
- Bahri, M., St-Pierre, J. and Sakka, O. (2011), Economic Value Added: A Useful Tool for SME Performance Management, International Journal of Productivity and Performance Management, 60(6): 603–621.
- Banerjee, A. (2000), Linkage between Economic Value Added and Market Value: An Analysis. Vikalpa, 25(3): 23–36.
- Bhasin, M. (2012), Economic Value Added and Corporate Performance Measurement: The Portrait of a Developing Country, International Journal of Contemporary Business Studies, 3(8): 2156–7506.
- Chauhan, P. (2012), Shareholders Value Creation in Indian Petroleum Industry: An Empirical Analysis, International Conference on Business, Economics, Management and Behavioral Sciences, January 7–8, 2012, Dubai.
- Chen, S. and Dodd, J. L. (1997), Economic Value Added (EVA): An Empirical Examination of a New Corporate Performance Measure, Journal of Managerial Issues, 9(3): 318–333.
- DeWet, J. H. (2005), EVA versus Traditional Accounting Measures of Performance as Drivers of Shareholder Value – A Comparative Analysis, Meditari Accountancy Research, 13(2): 1-16.
- Hausman, J. A. (1978), Specification Tests in Econometrics, Econometrica, 46(6): 1251–1271.
- Jahur, M. and Riyadh, A. (2002), Economic Value Added as a Management Tool: A Study on Selected Banking Companies in Bangladesh, Journal of Bank Posikrama, 27(1): 46–63.
- Kangarloei, S., Motavassel, M., Arzanlus, E. and Soleimani, B. (2012), The Investigation of the Relationship between Economic Value Added and Return on Assets in Tehran Stock Exchange, Journal of Business Management Dynamics, 1(11): 01–05.
- Kangarlouei, S., Motavassel, M., Azizi, A. and Farahani, M. (2012), The Investigation of the Impact of Ownership Concentration on Financial Performance Measurement Criteria and Market Value Added, International Journal of Economics and Management Science, 1(9): 44–51.
- Khan, S., Chouhan, V., Chandra, B. and Goswami, S. (2012), Measurement of Value Creation Vis-à-vis EVA: Analysis of Select BSE Companies, Pacific Business Review International, 5(3): 114–131.
- Kramer, J. K. and Peters, R. J. (2001), An Inter-industry Analysis of Economic Value Added as a Proxy for Market Value Added, Journal of Applied Finance, 11(1): 41–49.
- Levin, A., Lin, C. and Chu, J. (2002), Unit Root Tests in Panel Data: Asymptotic and Finite-sample Properties, Journal of Econometrics, 108(1), 1–24.
- Mousavi Shiri, M., Mousavi, K., Hesamvaghfi, S. and Ahmadi, A. (2012), The Effect of Intellectual Capital on Market Value Added, Journal of Basic Applied Science Research, 2(7): 7214–7226.
- •Nagar, N. (2007), Drivers of Shareholders’ Value, Journal of Global Economy, 3(3).
- Rajesh, M., Reddy, N. R and Reddy, T. N. (2012), An Empirical Study on EVA and MVA Approach, International Journal of Marketing, Financial Services & Management Research, 1(3): 87–97.
- Sakthivel, N. (2011), Value Creation in Indian Pharmaceuticals Industry: A Regression Analysis, Journal of Arts, Science and Commerce, 2(1): 215–232.
- Thenmozhi, M. (2000), Market Value Added and Share Price Behaviour: An Empirical Study of BSE Sensex Companies, Delhi Business Review, 1(1): 83–92.
- VijayKumar, A. (2011), Economic Value Added (EVA) and Shareholders Wealth Creation: A Factor Analytic Approach, Research Journal of Finance and Accounting, 2(12): 22–37.
- Wang, J. (2008), Investigating Market Value and Intellectual Capital for S&P 500, Journal of Intellectual Capital, 9(4): 546–563.
- Wet, J. (2005), EVA versus Traditional Accounting Measures of Performance as Drivers of Shareholder Value – A Comparative Analysis, Meditari Accountancy Research, 13(2): 1–16.
- Zeghal, M. and Maaloul, N. (2010), Analysing Value Added as an Indicator of Intellectual Capital and its Consequences on Company Performance, Journal of Intellectual Capital, 11(1): 39–60.
![](https://i-scholar.in/public/site/images/abstractview.png)
Abstract Views: 534
![](https://i-scholar.in/public/site/images/pdfview.png)
PDF Views: 8