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This paper aims to analyze the economic-financial performance (EFP) and value creation (VC) in the Brazilian construction industry.

Based on the theories of strategy and finance, a quantitative-qualitative, descriptive and explanatory and applied study was carried out, contrasting the performance of the Direcional company and the civil construction industry – both listed on the Brazilian Stock Exchange and the Over-the-Counter Market (B3)

The analysis of the EFP in the Brazilian construction industry shows that EZTEC, Helbor, Trisul and Direcional were the companies with the best EFP in the period. The analysis of the Economic Value Added (EVA®, henceforth EVA), as a VC metric and basis for assessing the relative technical efficiency score by Data Envelopment Analysis (DEA®, henceforth DEA), revealed that the companies Direcional, EZTEC, MRV and CR2 were considered efficient throughout the period covered. The multicriteria methodology for empirical testing of the EFP and VC allowed not only contrasts Direcional's results with the other companies of the construction industry but also offered a complementary tool for comparative analysis of enterprises of different sizes, structures and realities.

Regardless of any contextual limitations, from a theoretical point of view, the research not only helps fill the research gap aforementioned but also expands knowledge on the topic and demonstrates how this multi-criteria methodology (integrating DEA and EVA) can be used to assess EFP and VC in addition to traditional tools. However, this new approach evaluates, at the same time, corporate and sectorial effectiveness by contrasting the efficiency and efficacy (simultaneously) in the generation of performance and value of a company in relation to the industry.

Significant implications for managerial practice could be noted by offering a tool to improve company performance and creating a competitive benchmarking process for analysts, investors, managers, financing agencies, shareholders, policymakers and business owners, as well as organizations and sectors in similar situations – who need to assess the EFP and VC holistically and improve their decision-making processes.

The uniqueness and innovation of this research come from the original multi-criteria methodology developed, applied and validated for analysis of EFP and VC. This methodology was operationalized through DEA applied to the companies' EVA, making it possible to compare corporate results and those of the whole industry in a balanced way – an unexplored issue in the literature, especially in emerging economies, opening several avenues for future research.

Este artículo tiene como objetivo analizar el desempeño económico-financiero (DEF) y la creación de valor (CV) en la industria de la construcción brasileña.

Con base en las teorías de estrategia y finanzas, se realizó un estudio cuanti-cualitativo, descriptivo, explicativo y aplicado, contrastando el desempeño de la empresa Direcional y de la industria de la construcción civil, ambas cotizadas en la Bolsa y Mercado Extrabursátil Brasileña (B3).

El análisis de la DEF en la industria de la construcción brasileña muestra que EZTEC, Helbor, Trisul y la Direcional fueron las empresas con el mejor desempeño en el período. El análisis del Valor Económico Agregado (en adelante EVA), como métrica de CV y base para evaluar el puntaje de eficiencia técnica relativa mediante Análisis Envolvente de Datos (en adelante DEA), reveló que las empresas Direcional, EZTEC, MRV y la CR2 se consideraron eficientes durante todo el período cubierto. La metodología multicriterio para pruebas empíricas de la DEF y CV permitió no sólo contrastar los resultados de la Direcional con los de otras empresas del sector de la construcción, sino que también ofreció una herramienta complementaria para el análisis comparativo de empresas de diferentes tamaños, estructuras y realidades.

La singularidad y la innovación de esta investigación provienen de la metodología original multicriterio desarrollada, aplicada y validada para el análisis de DEF y CV. Esta metodología fue operacionalizada a través de DEA aplicado al EVA de las empresas, permitiendo comparar los resultados corporativos y los de toda la industria de manera equilibrada – un tema inexplorado en la literatura, especialmente en las economías emergentes, abriendo varias vías para futuras investigaciones.

Independientemente de las limitaciones contextuales, desde un punto de vista teórico, la investigación no solo ayuda a llenar el vacío mencionado anteriormente, sino que también amplía el conocimiento sobre el tema y demuestra cómo esta metodología multicriterio (integrando DEA y EVA) puede utilizarse para evaluar el DEF y CV además de las herramientas tradicionales. Sin embargo, este nuevo enfoque evalúa, al mismo tiempo, la efectividad corporativa y sectorial contrastando la eficiencia y eficacia (simultáneamente) en la generación de desempeño y valor de una empresa en relación con la industria.

Se podrían observar implicaciones significativas para la práctica gerencial al ofrecer una herramienta para mejorar el desempeño de la empresa y crear un proceso de evaluación comparativa competitivo para analistas, inversionistas, gerentes, agencias financieras, accionistas, formuladores de políticas y propietarios de negocios, así como organizaciones y sectores en situaciones similares, que necesitan evaluar el DEF y el CV de manera integral y mejorar sus procesos de toma de decisiones.

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.

The purpose of this paper is to examine the determinants of the EVA performance evaluation model for the Chinese banking industry. The authors investigate the impact of six bank-specific factors and corporate governance factors on financial performance.

The authors use the ordinary least square regression to examine the determinants of the EVA performance evaluation model for the Chinese banking industry. The findings are generally robust to alternative proxies of performance.

The empirical results indicate that credit risk, operational efficiency and the degree of innovation are positively related to banks’ EVA while capital management has a negative impact on it. In addition, although board size and independent directors are not related to the bank’s EVA, from the perspective of the traditional performance evaluation indicators, executive compensation has a positive impact on the bank’s profitability.

This paper has some limitations. First, due to the large number of adjustments to accounting items are required in the application of EVA when evaluating business performance, some items of the EVA model in this paper have been simplified, which may cause the bank’s EVA value to deviate slightly from the actual situation. Moreover, the sample includes only listed banks, so our results cannot generalize to non-listed banks, such as some small- and medium-sized commercial banks.

This paper contributes to the limited body of literature concerning the use and the determinants of EVA in emerging markets. The authors construct an EVA model which is suitable for China’s banks and reports comprehensive evidence on the drivers of EVA as a measurement tool.

The main objective of this study is to examine the claim of economic value added (EVA) proponents about its superiority as a financial performance measure compared to five traditional performance measures, i.e. net operating profit after tax (NOPAT), cash flow from operations (OCF), earnings per share (EPS), return on capital employed (ROCE) and return on equity (ROE) in Indian manufacturing sector, and simultaneously provide its empirical evidences. To achieve this, relative and incremental information content of various performance measures and their relationship with market value added (MVA) is tested and examined.

Principal component analysis (PCA) is one of the important multivariate methods utilized in business research for data reduction, latent variable modeling, multicollinearity resolution, etc. The present sample consists of 608 firm‐year observations from the Indian manufacturing sector for the period 2000‐2007. Firstly, principal component analysis (PCA) is employed to determine the important variables that explain market value. Secondly, alongside PCA, multiple regression models (OLS) are used to examine the relative and incremental information content of EVA and traditional performance measures.

These results about PCA reveal that variables like NOPAT, OCF, ROE, ROCE and EVA have maximum influence on the market value (MVA) of the sample companies, whereas EPS has a negative loading, so, EPS is discarded for further analysis. Further, the PCA loading matrix reveals that NOPAT, OCF, ROE and ROCE outscore EVA. The regression results regarding the relative information content test reveal that NOAPT and OCF outperform EVA in explaining the market value of Indian companies. The incremental information content test shows that EVA makes a marginal contribution to information content beyond NOPAT, OCF, ROCE and ROE. Overall, these empirical results about Indian companies do not support the Stern Stewart hypothesis that EVA is superior to traditional accounting‐based measures in association with market value of the firm.

The study concludes that along with financial variables, other non‐financial variables such as employees, product quality, etc., should be considered in order to capture the unexplained variation in the market value of Indian companies.

The purpose of this paper is to investigate the explanatory power of two value‐based performance measurement models, Economic Value Added (EVA^®) and shareholder value added (SVA), compared with three traditional accounting performance measures: earnings per share (EPS), return on investment (ROI), and return on equity (ROE), in explaining stock market returns in the Athens Stock Exchange (ASE).

The paper uses the Easton and Harris formal valuation model and employs both a relative and an incremental information content approach to examine which performance measure best explains stock market returns; and the explanatory power of the pairwise combinations of one value‐based performance measurement model and one traditional accounting performance measure in explaining stock market returns. For this purpose, pooled time‐series, cross‐sectional data of listed companies in the Athens Stock Exchange (ASE) over the period 1992‐2001 have been collected and modelled.

Relative information content tests reveal that stock market returns are more closely associated with EPS than with EVA^® or other performance measures. However, incremental information content tests suggest that the pairwise combination of EVA^® with EPS increases significantly the explanatory power in explaining stock market returns.

The results suggest that the market participants in the Greek stock market should pay additional attention to EVA^® but they should also consider other determinants to develop their investment strategies.

The paper is one of the first studies on the value relevance of traditional accounting (EPS, ROI, and ROE) and value‐based (EVA^® and SVA) performance measures in explaining stock market returns in the ASE. The results extend the understanding of the role of EVA^® and SVA in explaining stock market returns in the ASE, and, moreover, whether they may affect investors' decisions in a continental European market with market characteristics similar to that of Greece.

This paper attempts to propose the uses of a capital budgeting tool, the Economic Value Added (EVA)for a university. Although there are reports of widespread use of the EVA in many for‐profit organisations, there is no evidence in literature that it has been adopted as a capital budgeting tool for a university. In this paper the application of the EVA for a university is proposed. It shows how the EVA can increase the awareness of the importance of asset utilisation in universities and guide universities to better resource management. EVA is proposed for use in a university setting in two different segments: for‐profit and non‐profit. The EVA has been adjusted with a new measure, Academic Value Added Ratio (AVAR) to reflect the university’s objective. The perception of academic staff in the case study university in Thailand with regards to the concept of applying the EVA to a university is further investigated. The results indicate that most members of management staff do not oppose this concept if it is implemented in a proper way.

Studies that examine the relationship of economic value added (EVA) to market value did not isolate the EVA effect in conjunction with controlling for the economic effect of the market. Since the EVA metric is viewed as value‐added apart from the market, operational managers will benefit from a procedure that separates the market driven versus firm driven (EVA) effects. Our paper examines the effects of the economy and EVA on MVA. The results indicate that EVA and GDP significantly affect MVA. Furthermore, the MVA‐EVA relationship shows a systematic bias between the largest MVA firms and the smallest MVA firms. Overall, our study provides implications for corporate executives utilizing EVA to evaluate managerial performance linked to MVA.

Several researchers and practitioners, notably Stern Stewart Consulting Company and Associates, have claimed that economic value added (EVA) is superior to traditional accounting measures in driving shareholder value. Other researchers have refuted these claims by supplying data in support of traditional accounting indicators such as earnings per share (EPS), dividends per share (DPS), return on assets (ROA) and return on equity (ROE). This study endeavoured to analyse the results of companies listed on the JSE Securities Exchange South Africa, using market value added (MVA) as a proxy for shareholder value. The findings do not support the purported superiority of EVA. The results suggest stronger relationships between MVA and cash flow from operations. The study also found very little correlation between MVA and EPS, or between MVA and DPS, concluding that the credibility of share valuations based on earnings or dividends must be questioned.

Earned Value Analysis (EVA) is an accepted theoretical technique advocated for the control of projects. This paper attempts to refine and improve the performance of traditional EVA by the introduction of a hybrid methodology based on work packages and logical time analysis entitled Work Package Methodology (WPM). The proposed WPM provides the means to periodically update project cost and time performance by restricting EVA calculations to individual work packages. These are then subjected to a logical time analysis to determine the predicted project cost and time to completion. A comparative analysis between WPM and EVA is then undertaken using adapted test data derived from knowledge of previous projects to identify the reasons for variation in the results obtained from both methods. The evaluation of the test results indicates that when the Cost Performance Index (CPI) and the Schedule Performance Index (SPI) are well above or below unity then, especially in the early stages of the project, traditionally applied EVA predictions can be un‐realiable and require further investigation and evaluation. WPM provides a vehicle for judging the performance of EVA by applying an alternative logical time and cost utilizing work sequence and construction methods. The predictive performance of EVA is refined by these means.

This study examines the association between stock returns and wealth creation (as measured by Market Value Added, MVA) on the one hand, and various performance measures of joint stock companies in Saudi Arabia. These measures include traditional accounting measures; Earning Per Share (EPS), Return on Equity (ROE), and Cash Flow (CF), as well as a relatively recent measure; the Economic Value Added (EVA). The study reveals strong links between various traditional accounting measures and show that those measures give similar indication of a company's overall performance. The results indicate that MVA and stock returns are associated with traditional accounting measures, but not with EVA. However, EPS is found to dominate other measures of performance with respect to its association with stock returns and MVA. The implications of this study are that investors in the Saudi market are most likely using simple traditional accounting performance measures in their valuing of companies, and hence more efforts should be directed to enforcing disclosure requirements for these measures.