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The Relationship between EVA and Stock Returns: Empirical Evidence from KSE

Author

Listed:
  • Muhammad Akbar

    (Bahria University, Islamabad)

  • Muhammad Kamran Khan

    (Institute of Management Sciences, Peshawar)

  • Shahid Ali

    (Institute of Management Sciences, Peshawar)

Abstract

This paper aims at Investigating and finding empirical support of the relationship between Economic Value Added (EVA) and stock prices/returns in Pakistani firms. There have been studies conoucrec to empirically investigate the relationship of EVA with stock returns. However, there is lack of literature on the empirical relalionship between EVA and stock returns in Pakistan. The study uses linear regression methods to lest the hypothesis thai EVA statistically significantly retates to stock prices/returns. The sample comprises 0116 companies of fuel and energy sector traded in the Karachi stock exchange over sample period 2001 to 2008. Tile findings 01 the study suggest that stock returns and stock prices are positively related with EVA. However, the relationShip is stronger between stock prices and lag EVA as well as between stock returns and change in lag EVA

Suggested Citation

  • Muhammad Akbar & Muhammad Kamran Khan & Shahid Ali, 2010. "The Relationship between EVA and Stock Returns: Empirical Evidence from KSE," Business & Economic Review, Institute of Management Sciences, Peshawar, Pakistan, vol. 2(2), pages 1-5, October.
    • Handle: RePEc:bec:imsber:v:2:y:2010:i:2:p:1-5
    DOI: .
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    File URL: http://imsciences.edu.pk/files/journals/Vol.%202%20No.2%20October%202010/Paper%20(1).pdf
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    Citations

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    Cited by:

    1. Shah, Mohay Ud Din & Shah, Attaullah & Khan, Safi Ullah, 2017. "Herding behavior in the Pakistan stock exchange: Some new insights," Research in International Business and Finance, Elsevier, vol. 42(C), pages 865-873.

    More about this item

    Keywords

    Economic Value Added; stock returns; prices;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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