Measuring value creation: VAIC and EVA

Iazzolino, Gianpaolo; Laise, Domenico; Migliano, Giuseppe

doi:10.1108/mbe-10-2013-0052

Cited by 29 publications

(35 citation statements)

References 19 publications

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“…In this regard, Bryant et al (2004) cite research that shows that both employees' actions and intangible assets, neither of which is captured by traditional performance measures, should be included in the assessment of a company's success. Iazzolino et al (2014) propose that a firm's performance must be measured not only by financial performance measures such as EVA but also through multi-criteria methodologies such as the Balanced Scorecard.…”

Section: Resultsmentioning

confidence: 99%

Industry-specific determinants of shareholder value creation

Hall

2016

SEF

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Purpose -Prior studies on determinants of shareholder value creation have reported conflicting and sometimes confusing results. In this study, to obtain more refined and industry-specific results regarding variables determining shareholder value creation, an analysis was performed focusing on different categories of firms or industries. Design/methodology/approach -Two dependent and 11 independent variables were applied to five different industries to obtain the best set of significant value drivers of shareholder value creation for a particular industry. Findings -Market value added (MVA) is a better indicator of shareholder value created compared to a market adjusted return. Accounting-based variables (EPS, ROA and NOPAT) are superior to economic-based variables (EVA and ROCE) in explaining shareholder value creation, but results differ, depending on the dependent variable chosen as shareholder value creation measure. For each industry, there is a unique set of variables that determine shareholder value creation; the industrial goods industry has seven significant value drivers, namely, EPS, NOPAT, ROCE, the Spread, EVA, EBEI and REVA, whilst for the food and beverages industry, there were only two significant value drivers (EPS and ROA). Originality/value -These findings imply that management, analysts and shareholders should, depending on the specific industry in which their firm operates, take into account a more specific set of variables when making their financial decisions, including compensation or reward structuring.

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Section: Resultsmentioning

confidence: 99%

Industry-specific determinants of shareholder value creation

Hall

2016

SEF

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“…Some studies also compared different measurement models. For example, Iazzolino et al (2014) compared the VAIC and EVA models, focusing on Italian companies. The results indicate that scholars have extensively analysed VAIC, mainly connecting it with performance measurement in both developing and developed countries.…”

Section: General Criticisms Of the Vaic Modelmentioning

confidence: 99%

If You Can Measure It, You Can Manage It: A Case of Intellectual Capital

Nadeem

Dumay

Massaro

2018

Australian Accounting Review

128

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Despite the great importance attributed to intellectual capital (IC) in the past two decades or so, its measurement and management have remained elusive, mainly because of inappropriate prior models of IC measurement. The purpose of this study is, therefore, to make adjustments to an existing model, the Value Added Intellectual Coefficient (VAIC), and to present an adjusted‐VAIC model to measure IC. We tested our new model on data from 10 emerging and developed world markets and obtained more consistent results than prior studies. Our results indicate a significant positive relationship between IC and its components (human, innovation and physical capitals) and firm performance. Therefore, the adjusted‐VAIC model can be used with confidence to measure IC. Our study has important implications for both academia and industry concerning the measurement of IC.

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“…Given the objective of investigating how firms' performances could be re-interpreted by looking at two main perspectives, (i) intellectual capital and (ii) financial performances respectively (Iazzolino et al, 2014), an exploratory study design based on Euronext listed firms has been carried out by the authors. The main hypothesis on which this study was based is showed below: Tseng et al, 2013).…”

Section: Research Methodology Designmentioning

confidence: 99%

Positioning firms in a new business performance space: an empirical study design on Euronext listed companies

Iazzolino

Migliano²

2016

Investment Management and Financial Innovations

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Purpose - This research was designed to shed light on what is the role played by intellectual capital within firms for the achievement of leadership positions, according to two main perspectives: (i) intellectual capital commitment and (ii) financial/market performances. Design/methodology/approach - An exploratory study design, involving 10-year data about 45 firms listed on Euronext 100, was devised. Firstly, firms were rated according to their intellectual capital commitment and their financial performances, by gathering indicators from a literature analysis; then, it was developed a new tool, was developed the Positioning Matrix, which is a new business space, where firms can be placed according to the rates received in the first phase. Finally, the authors analyzed all the changes that the sample firms experienced all over the ten years considered. Findings - Findings showed how companies can get the market leadership by using strategies based on their intellectual capital commitment. It was empirically found that intellectual capital should be considered as a necessary, but not sufficient condition to be recognized amongst the market leaders. Research limitations/implications - The main limitation of this study is that it is based on an empirical standpoint; therefore, it could be interesting to verify the findings by using quantitative approaches. Since there are no standard ways to disclose intellectual capital information, some companies had to be excluded from analysis. Originality/value - This work was especially designed for practitioners who could use the Positioning Matrix to (i) figure out how intellectual capital could contribute to get a better position within the market and (ii) have a better understanding of the investments into intellectual capital made by other firms (i.e., competitors, partners, etc.) to get the market leadership. Keywords: intellectual capital; business performances; financial performance evaluation, Euronext. JEL Classification: 034, L1

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Measuring value creation: VAIC and EVA

Cited by 29 publications

References 19 publications

Industry-specific determinants of shareholder value creation

Industry-specific determinants of shareholder value creation

If You Can Measure It, You Can Manage It: A Case of Intellectual Capital

Positioning firms in a new business performance space: an empirical study design on Euronext listed companies

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