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Asymmetric impact of economic value-added dynamics on market value of stocks in Pakistan stock exchange, a new evidence from panel co-integration, FMOLS and DOLS

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  • Adil Pasha
  • Muhammad Ramzan

Abstract

Shareholders' wealth maximization is the ultimate objective of firms. Economic value added (EVA) is a financial metric linked to shareholders' wealth maximization. Prior studies revealing the efficacy of value-based and accounting-based performance measures are inconclusive. Moreover, all prior research ignored long-run and short-run co-integration of traditional as well as value-based financial performance measures with share prices. This research found EVA has a negative weak but significant relation with stock return in long run by employing panel co-integration, panel FMOLS and panel DOLS for 70 nonfinancial Pakistan Stock Exchange listed firms from 13 industries for a study period of 2006–2015.

Suggested Citation

  • Adil Pasha & Muhammad Ramzan, 2019. "Asymmetric impact of economic value-added dynamics on market value of stocks in Pakistan stock exchange, a new evidence from panel co-integration, FMOLS and DOLS," Cogent Business & Management, Taylor & Francis Journals, vol. 6(1), pages 1653544-165, January.
    • Handle: RePEc:taf:oabmxx:v:6:y:2019:i:1:p:1653544
    DOI: 10.1080/23311975.2019.1653544
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    Cited by:

    1. Ali Akbar Gholizadeh & Davood Jafari Seresht & Zahra Bayat & Leyla Jabari, 2023. "The relationship of financial performance and stock returns in countries under economic sanctions," Journal of Asset Management, Palgrave Macmillan, vol. 24(1), pages 16-26, February.
    2. Vasilii Erokhin & Tianming Gao, 2020. "Impacts of COVID-19 on Trade and Economic Aspects of Food Security: Evidence from 45 Developing Countries," IJERPH, MDPI, vol. 17(16), pages 1-28, August.
    3. Gao Tianming & Vasilii Erokhin & Aleksandr Arskiy & Mikail Khudzhatov, 2021. "Has the COVID-19 Pandemic Affected Maritime Connectivity? An Estimation for China and the Polar Silk Road Countries," Sustainability, MDPI, vol. 13(6), pages 1-39, March.

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