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The paper aims to find out the information content of performance measures from accounting and value-based measures that best explain the total shareholder return.

To achieve this aim, static and dynamic panel data regression analysis is applied to the sample of 56 Indian companies taken from the Nifty Midcap 100 Index, between 2012 and 2019.

It is found that accounting-based measures have more relative information content in predicting total shareholder return as compared to value-based measures. Economic value added (EVA) and cash value added (CVA) do not add to the information content provided by accounting-based measures. A combination of accounting-based measures and value-added intellectual coefficient (VAIC) adds marginally to the information content provided by accounting-based measures in explaining the total shareholder return. Dynamic panel regression analysis shows that return on assets (ROA), return on capital employed (ROCE), return on equity (ROE) and EVA have a significant impact on total shareholder return.

In this study, along with EVA, other measures from value-based measures, i.e. CVA are empirically tested to explain the total shareholder return. Intellectual capital efficiency computed by VAIC is also empirically tested along with accounting-based measures, EVA, CVA and market value added (MVA). To bring robustness to findings, data are tested by using dynamic panel regression analysis.

The main aim of this paper is to examine the claim that economic value added (EVA) advocates its superiority over the traditional accounting-based financial performance measures, i.e. profit after tax (PAT), earnings per share (EPS), return on assets (ROA), return on equity (ROE) and return on investment (ROI) in the Indian manufacturing sector and at the same time, give empirical facts. It also tests and examines the information content of various performance measures and their relationship with stock returns.

The paper uses the sample of 534 Indian manufacturing companies from the Bombay Stock Exchange (BSE) during the period 2000–2018. Multiple regression models are applied to examine the information content of EVA and traditional performance measures in explaining shareholders’ returns.

Relative information content tests revealed that traditional accounting-based measures such as EPS, ROE and ROA performed better than EVA in explaining the returns of Indian manufacturing companies. Incremental information content of EVA adds little contribution to information content above traditional performance measures. The claim of superiority of EVA over accounting-based measures in association with shareholder returns is proved invalid in Indian manufacturing companies.

This study concludes that EVA has no superiority over traditional accounting-based financial performance measures in explaining stock returns of Indian manufacturing companies. To achieve heftiness in outcomes, panel data are tested by using Breusch–Pagan–Godfrey (BPG) test for heteroskedasticity, Hausman’s test for fixed and random effect, variance inflation factor (VIF) test for multicollinearity and Durbin–Watson test for autocorrelation.

Theoretical arguments have indicated that long‐term accounting‐based performance plans motivate executives to improve long‐run firm performance (Smith and Watts, 1982; Larcker, 1983). Following conflicting empirical evidence related to the stock market reaction associated with the adoption of accounting‐based long‐run performance plans, this study seeks to gain further insight into the effect of such plans on accounting income‐based and value added‐based measures of productivity and return. The results indicate that firms adopting accounting‐based performance plans do not experience any greater gains in accounting return or productivity measures than do a set of control firms. Thus, such plans may not have the intended effect. Because performance plans are a popular method of executive incentive compensation, further research on the impact of these plans is indicated.

This study sheds light on the relation between intellectual capital and firm performance. The study argues that traditional performance measurement based on accounting is still able to explore the relation between intellectual capital and performance.

The study was conducted at 198 firms from two Gulf Cooperation Council countries: Kingdom of Saudi Arabia and Kingdom of Bahrain for the period 2014–2016. To measure intellectual capital, the value added intellectual coefficient model was adopted along with two measures of performance: accounting-based performance which is return on assets and market-based performance which is Tobin’s Q, in addition to the Random-Effects Regression.

Study findings came up with evidences that support the relationship between intellectual capital and accounting-based performance, but negates any relation between intellectual capital and market-based performance. The findings also revealed different results, between Saudi Arabia’s and those of Bahrain.

The study contributes to the debate on the validity of relating intellectual capital to the traditional accounting-based performance.

The purpose of this paper is to investigate the effect of corporate governance mechanisms on the financial performance of the United Arab Emirates (UAE) listed firms.

Relying on a sample of 95 UAE listed firms affiliated to financial and non‐financial sectors, the paper performs a cross‐section regression analysis to test whether there is a significant relationship between governance mechanisms (voluntary disclosure, CEO duality, board size, board committee and audit type) and UAE firms' performance while controlling for firm size, industry type, firm listing years and leverage. The paper relies on data published on year 2008 and utilizes the accounting‐based measures of Return on Assets (ROA), Return on Equity (ROE) as well as the market measure (Tobin's Q) in order to measure the UAE firms' financial performance.

The empirical results show that voluntary disclosure, CEO duality and board size are significantly influencing the UAE accounting‐based performance measure, while none of the governance variables significantly affects firms' market performance measure. The results also reveal that firm size is the only control variable that significantly influences firms' performance. This paper provides evidence showing that the accounting‐based performance measures are more objective in the years where unstable economic conditions exist.

The paper's findings indicate that the underlying principles of corporate governance are applicable in emerging markets. The findings are important to regulators, investors, managers, and researchers aiming at developing new policies that establish better regulatory infrastructure that increases investors' confidence and attracting foreign investment.

The paper is one of very few studies that examine the relationship between corporate governance and firms' financial performance under economic turbulent in an emerging market economy, the UAE.

This paper attempts to examine a canonical (simultaneous) relationship between service industry CEOs' compensation and corporate performance with respect to accounting‐based and market‐based performance measures. In addition, this study examines the effect of firm size on compensation. The results of this study suggest that executive compensation depends simultaneously on both market‐based and accounting‐based performance measures. EPS, ROA, ROE and Market Rate of Return are positively associated with both cash compensation and long‐term compensation. Firm size is also positively related to the long‐term compensation.

This study aims to investigate the bright and dark sides of environmental, social and governance (ESG) during the COVID-19 pandemic, including both the outbreak and recovery periods, for the Chinese hospitality industry.

Using panel data of 564 firm-quarter observations from 2018 to 2020, the authors adopt fixed-effects regression estimation with standard errors clustered at the firm level. To address potential endogeneity concerns, the authors also use the two-stage least squares estimator with instrumental variables.

The results suggest that ESG plays different roles in market- and accounting-based performance during the COVID-19 outbreak and recovery periods. Specifically, ESG practices show a bright side as a reputation builder to mitigate the negative pandemic impact on market-based performance, whereas the dark side of ESG practices consumes firm resources to aggravate the negative pandemic impact on accounting-based performance during the coronavirus outbreak. These results also suggest hospitality companies benefit bountifully from ESG practices during the COVID-19 recovery.

ESG plays a vital role for hospitality firms by providing insurance-like protection during and after the COVID-19 outbreak. Additionally, hospitality firms should evaluate their capability to adapt resource-consuming ESG practices.

Existing hospitality COVID-19 studies have investigated the effect of ESG on firm performance within a short period with mixed results. This study extends the literature by showing the different effects of ESG practices on market- and accounting-based performance during the COVID-19 outbreak and recovery periods.

The main aim of this chapter is to review the use of accounting-based measures of merger and acquisition (M&A) performance. To do so, we conducted a keyword search in 28 leading management journals and one edited book (i.e., Advances in Mergers & Acquisitions). To complement our review, we draw on very recent literature reviews of M&As (e.g., Haleblian, J., Devers, C. E., McNamara, G., Carpenter, M. A., & Davison, R. B. (2009). Taking stock of what we know about mergers and acquisitions: A review and research agenda. Journal of Management, 35(3), 469–502; Kolev, Haleblian, & McNamara, 2012; Meglio, 2009). Results indicate that accounting-based measures of performance have been used in 36 studies. Also, in these studies, there exists much heterogeneity with respect to the operationalization of M&A performance, the time lag, and the level of analysis. Next, the chapter proceeds with the discussion of the advantages and disadvantages of accounting measures and the proposition of four substantive priorities for future research in the area.

The purpose of this paper is to examine and compare the relative and incremental value‐relevance of a comprehensive set of accounting‐based measures of firm's performance in the emerging capital market of Egypt.

The regression models are estimated using OLS to investigate the relative and incremental value relevance of accounting‐based performance measures. The relative value relevance tests are used to examine which performance measures better explain stock returns. The study also uses the incremental value relevance tests to examine whether one of these measures provides value‐relevance data beyond that provided by another.

The results of the empirical tests indicate that relative and incremental value relevance tend to increase when moving down in the income statement, with net income having the largest relative and incremental value relevance while total sales have the lowest relative and incremental value relevance. Also, all of the accrual‐based performance measures have relative and incremental value relevance statistically higher than that of operating cash flows.

The results highlight the importance of accounting‐based performance measures in Egypt. The results shed light on the fixation on net income that is bottom line performance measure in the income statement where net income has the highest value relevance to Egyptian capital market. However, owing to relatively small sample size, given the thinness of the Egyptian capital market, these findings should be interpreted with caution.

This study presents extended research on the usefulness of accounting‐based metrics as proxies for firms' performance in Egypt as one of emerging markets.

The purpose of this study is to propose an analytical model that investigates both a direct path between corporate governance quality and earnings quality and an indirect path, in which firms' performance is a mediating variable that is influenced by corporate governance quality and that, in turn, influences earnings quality.

The study employs a structural equation modelling (SEM), to a sample of Egyptian listed firms during 2011–2017, to test the proposed analytical model and to determine the relative importance of both the direct and indirect paths.

The findings show a statistically significant evidence of both a direct path from corporate governance quality to earnings quality, and an indirect path that is mediated by firms' performance, suggesting that both corporate governance quality and performance have a complementary effect on earnings quality. However, the weight of the evidence favouring the direct path is more important in case of accounting-based performance measures; and the weight of the evidence favouring the indirect path is more important in case of market-based performance measures.

The current study has some limitations. First, the study focuses specifically on one proxy for measuring earnings quality which is the absolute value of discretionary accruals. Other proxies of earnings quality could be examined in future research, such as income smoothing, earnings persistence and timely loss recognition. Another limitation is that only financial performance measures were examined, namely, return on assets, return on equity, price-to-earnings ratio and market-to-book value. Notwithstanding, non-financial performance measures could be investigated in future studies, such as balanced scorecard (BSC). Furthermore, considering cultural, political and legislative differences among countries, the results may not be generalised outside the scope of the current sample (i.e. Egyptian listed firms).

The implications of the findings for both theory and practice are discussed.

This study is distinguished by validating an analytical model that has been overlooked by prior studies. Moreover, it provides a new constructed index for measuring corporate governance quality. Furthermore, it uses a new sophisticated statistical technique, which is SEM, for testing the proposed model.