Do Stock Markets Value Firm-Level Technical Efficiency? Some UK Evidence
AbstractAn empirical model determining the relationship between changes in firm-level productivity and changes in firm value is estimated using an unbalanced panel of 706 public limited companies observed over the period 1996-2002. The main findings are: (1) changes in technical efficiency and labour productivity are reflected in changes in the value of manufacturing firms, and (2) changes in earnings per share and return on capital employed explain changes in the value of service sector firms but technical efficiency and labour productivity do not. For manufacturing firms, the evidence is consistent with the stock market valuing the adoption of better management practices that lead to better resource utilisation.
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Bibliographic InfoPaper provided by Department of Economics, University of Leicester in its series Discussion Papers in Economics with number 04/23.
Date of creation: Aug 2004
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Postal: Department of Economics University of Leicester, University Road. Leicester. LE1 7RH. UK
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Find related papers by JEL classification:
- G12 - Financial Economics - - General Financial Markets - - - Asset Pricing
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
This paper has been announced in the following NEP Reports:
- NEP-ACC-2004-08-23 (Accounting & Auditing)
- NEP-ALL-2004-08-23 (All new papers)
- NEP-CFN-2004-08-23 (Corporate Finance)
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