Present scholarship targets to examine the robustness of EVA in
Pakistan and information content while controlling prior research
ignored firm-specific factors towards excess stock returns. The design of this research
used panel data analysis whereby relevant, incremental information content and event
analysis of EVA and conventional accounting performance measure via share prices is
done by employing nested panel data analysis for 70
non-financial PSX listed companies from 13 industries
for a study period of 2006-2015. Against prior research,
EVA doesn’t add to the incremental information content
of the model. Moreover asymmetric results were
revealed using nested and separate regression analysis.
This study is aimed to benefit stakeholders in the context
of prudent investment choice. This study identifies ROA
as the most important financial performance metric for
local investor’s decision making. However firm-specific
characteristics like financial leverage, liquidity, and
firm size also play a pivotal role.
1-Malik Adil Pasha Ph.D. Scholar Department of Management Sciences, Preston University, Islamabad, Pakistan.2-Muhammad Ramzan Associate Professor, Department of Management Sciences, Preston University, Islamabad, Pakistan.3-Muhammad Asif Visiting Faculty,Federal Urdu University of Arts, Science and Technology, Islamabad, Pakistan.