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Do key performance indicators derived from value-based management better predict total stockholder return than traditional performance indicators?

Author

Listed:
  • Matthias Olivier

    (UCAM Universidad Cat?lica de Murcia, Murcia, Spain)

  • Roland Wolf

    (FOM University of Applied Sciences for Economics and Management, Essen, Germany)

Abstract

Purpose: This study investigates whether key performance indicators derived from value-based management are able to better predict total stockholder return than traditional performance indicators. Design/Methodology/Approach: A sample (n = 1388) is drawn from corporate indices in four European countries (France, Germany, Italy, and Spain). The explanatory power of traditional performance indicators and value-based performance indicators is compared with regard to total stockholder return. Findings: It is found that in the sample, value-based performance indicators are not able to better explain total stockholder return than traditional performance indicators. Practical Implications: The results suggest that companies should consider placing greater emphasis on performance indicators, as leveraging both traditional and value-based performance metrics could help improve understanding of stockholder returns and potentially drive more informed strategic decision-making. Originality/Value: The study provides insights into the relative effectiveness of value-based performance indicators versus traditional ones in explaining stockholder return across multiple European countries. Paper Type: Research Paper.

Suggested Citation

  • Matthias Olivier & Roland Wolf, 2025. "Do key performance indicators derived from value-based management better predict total stockholder return than traditional performance indicators?," Finance, Accounting and Business Analysis, University of National and World Economy, Institute for Economics and Politics, vol. 7(1), pages 30-42, June.
    • Handle: RePEc:aan:journl:v:7:y:2025:i:1:p:30-42
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Value Based Management; key performance Indicators; Value oriented performance measurement; Value Accounting.;
    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
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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