Is Value-based More Associated with Stock Return Than Accounting-based Measures? the Asean-5 Evidence
Arif Widodo Nugroho1, Ari Warokka2, Helen Purwatiningsih3, Zainudin Hassan4
1Arif Widodo Nugroho, Student, Programe Magister Management, State University of Jakarta, Indonesia.
2Ari Warokka, Lecturer, State University of Jakarta, Indonesia.
3Helen Purwatiningsih, Ph.D Student, Department of Educational Technology, State University of Jakarta, Indonesia.
4Zainudin Hassan, Assoc Professor, Department of Educational Foundation and Social Sciences, Universiti Teknologi Malaysia, Johor, Malaysia.
Manuscript received on 16 June 2019 | Revised Manuscript received on 11 July 2019 | Manuscript Published on 17 July 2019 | PP: 610-617 | Volume-8 Issue-1C2 May 2019 | Retrieval Number: A11000581C219/2019©BEIESP
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© The Authors. Blue Eyes Intelligence Engineering and Sciences Publication (BEIESP). This is an open access article under the CC-BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
Abstract: The purpose of this research is to test the support of value-based measurements about its superiority as a measure of a company’s financial performance compared with accounting measurements. This study uses a sample of 25 mining companies in ASEAN-5 during the period 2007-2017. The sample selection by purposive sampling technique is top 5 mining companies based on total assets owned and registered in the exchanges of each ASEAN-5 nation. This study uses panel data and applying ordinary least squares (OLS) regression to test the relative information content and incremental information of value-based measurements (EVA, MVA) and accounting measurements (ROA, ROE, EPS) in explaining stock returns. The finding is ROA and ROE outperformed EVA and MVA in explaining stock return for mining companies in ASEAN-5, Thailand, and Vietnam. Meanwhile, in Malaysia, Indonesia, and Philippines value-based outperformed accounting-based measures. The incremental information content test for mining companies in ASEAN-5, Malaysia, and Indonesia show that value-based measures make a marginal contribution to information content beyond accounting measures in association with stock return. On the contrary, value-based measures did not have incremental content information in Thailand, Philippines, and Vietnam.
Keywords: ASEAN, Value-based Measurements, Economic Value Added, Accounting-based Measures, Economic Value Added.
Scope of the Article: Authentication, Authorization, Accounting