Determinant Factors of the Economic Value Added in the Case of Romanian Companies Listed on the Bucharest Stock Exchange

Author:Senior Lecturer Mirela GANEA, Ph. D.

JEL:C12, C18, G30

DOI:

Keywords:economic value added, factors influencing EVA, Pearson correlation coefficient

Abstract:
The economic value added (EVA) is a performance indicator used in assessing a firm`s ability to create value for its shareholders. In the international literature, this indicator is considered a standard managerial criterion, used in the substantiation of the company`s current and future strategy. Depending on this strategy’s degree of achievement, EVA becomes a landmark in the remuneration policy of the company`s managers and employees. Since achieving this objective (value creation) depends on the efficiency with which resources involved in the business are used and generate a higher return on their cost, EVA must be analyzed in correlation with indicators which quantify the determinant factors of value. \r\nThe starting point of this work was to identify those practical issues of a firm`s activity, which could influence the evolution of the economic value added (EVA). The next step was to analyze the intensity and direction of the link existing between EVA and the indicators identified as drivers of the shareholder value, by carrying out an empirical study at the level of 12 Romanian companies listed on the Bucharest Stock Exchange (BVB). The research was conducted on the basis of financial and accounting data relating to the year 2013. The methodology used for analysis was the technique of correlation, as a method of measuring the intensity of the mathematical relationship between two or more variables, using the Pearson correlation coefficient.\r\n

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