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Do Financial Indicators Drive Market Value of Firms in the Transition Economies? The Russian Case

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  • Jyoti Gupta
  • Pramuan Bunkanwanicha
  • Sergey Khakimov
  • Philippe Spieser

Abstract

This article studies the factors which influence market valuation of Russian listed firms. Several financial metrics and corporate governance indicators are analysed. Emphasis is given to multicollinearity and cause-and-effect relationships between independent variables. Main results show that there is no significant correlation between the fundamental financial indicators and the Tobin’s Q. However, state ownership, concentration of capital and size are negatively associated with the firm valuation. The evidence suggests that the costs of government ownership outweigh its benefits. JEL classification: G15, G14, C22, F23

Suggested Citation

  • Jyoti Gupta & Pramuan Bunkanwanicha & Sergey Khakimov & Philippe Spieser, 2016. "Do Financial Indicators Drive Market Value of Firms in the Transition Economies? The Russian Case," Journal of Emerging Market Finance, Institute for Financial Management and Research, vol. 15(2), pages 225-268, August.
    • Handle: RePEc:sae:emffin:v:15:y:2016:i:2:p:225-268
    DOI: 10.1177/0972652716645894
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    More about this item

    Keywords

    Market value; Tobin’s Q; Russia; emerging markets; corporate governance; performance;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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