analysis of the factors that impacting the mva of brazilian public companies: does eva® is more value relevant than the traditional performance indicators?

Abstract

This study aimed to analyze the explanatory power of EVA® and others traditional accounting indicators, assessing which of these measures is more related to the creation of shareholder wealth. Therefore, we analyzed 748 firms-years between 2005 and 2010. Through the use of pooled of ordinary least square regressions (POLS), we tested the informational content of EVA and traditional indicators, individually and together, as to the explanation of the market value added as a proxy for the generation of wealth for investors. Therefore, we used five univariate equations for the purpose of analyzing the explanatory power for each of the variables used in the study, whether accounting variables or EVA. After that, we used two multivariate models: one containing only the traditional accounting variables and the other with the addition of EVA, testing, through the Wald test, the hypothesis that EVA adds informative content to traditional accounting indicators. According to this methodology, it was observed that EVA is not more value Relevant than traditional indicators by univariate models, but add informative content to the set of indicators, in the joint analysis by multivariate models.