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Empirical Examination Of The Role Of Factors Affecting The Value Of Firms, In Respect Of 8 Years

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  • KISS Anita

    (Institute of Accounting and Finance, Faculty of Economics and Business, University of Debrecen, Debrecen, Hungary)

Abstract

The goal of writing this article is to continue my previous empirical research (Kiss 2015). In the article written in 2015, I dealt with the question, what factors affect the value of the firm? Looking at the entire period (2004 through 2011) I found that all value creators had a significant impact on the dependent variable, on the value of the firm. Earnings before interest and taxes (EBIT), reinvestment, invested capital, return on invested capital, profit margin, sales growth rate had a positive impact on the value of the firm, while tax rate and return on assets at market value (MROA), had a negative impact. In this research I am seeking an answer if any changes occurred, when analysing the role of factors affecting the value of a business, in these factors and their importance, in the period under review. In my paper I present the primary objective of a firm, its possible approaches, while I shall also deal with the concept of dual value creation. Then I outline the dimensions of value, by reviewing the relationship of consumers’ value and shareholder value. Shareholder value is a relevant value category concerning the article, therefore I address its detailed characterization and firm theory background. The structure of the study is the following. First I review the value creation process based on literature from the most prominent academic authors. In the next part I describe the primary objective of a firm, then the various dimensions of value and the firm theory background of shareholder value. Then I move to the value creators, which I am going to use in the empirical study. Finally I introduce the research, and in the last part I formulate my conclusions.

Suggested Citation

  • KISS Anita, 2019. "Empirical Examination Of The Role Of Factors Affecting The Value Of Firms, In Respect Of 8 Years," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(2), pages 162-168, December.
    • Handle: RePEc:ora:journl:v:1:y:2019:i:2:p:162-168
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    References listed on IDEAS

    as
    1. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    2. Merton H. Miller & Franco Modigliani, 1961. "Dividend Policy, Growth, and the Valuation of Shares," The Journal of Business, University of Chicago Press, vol. 34, pages 411-411.
    3. John Lintner, 1965. "Security Prices, Risk, And Maximal Gains From Diversification," Journal of Finance, American Finance Association, vol. 20(4), pages 587-615, December.
    4. William F. Sharpe, 1964. "Capital Asset Prices: A Theory Of Market Equilibrium Under Conditions Of Risk," Journal of Finance, American Finance Association, vol. 19(3), pages 425-442, September.
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    More about this item

    Keywords

    value creation; value chain; firm valuation; global financial crisis;
    All these keywords.

    JEL classification:

    • 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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