The excess market value added functionality for expectations based management

• Autorzy: Kaczmarek Jarosław

Identyfikatory

DOI

10.29119/1641–3466.2024.191.16

• Języki publikacji: EN

Abstrakty

EN

Purpose: The research presented in this article aims to investigate the usefulness of the excess measures of created value for the needs of Expectations Based Management. The theoretical and methodological objective is to propose extending the scope of classical measures of value by including shareholder expectations. The utilitarian objective is to measure value creation using excess market value added to equity WIG30 companies of the Warsaw Stock Exchange in 2017–2022, and its relations with companies capitalisation and market value added. Design/methodology/approach: The proposed measure of excess market value added to equity compares expected value as an increase in companies capitalization related to a minimum rate of return on equity equivalent to its cost, decreased by this capital, with the actually achieved value. The analysis makes use of mathematical statistics tools, including non–standard ones, the measure of concentration, and the taxonomic measure of similarity. Findings: Firstly, the research shows that excess measure does not distort market information and is an appropriate tool for assessing the effectiveness of shareholder value creation. Secondly, the managers of WIG30 WSE companies did not meet shareholder expectations in a satisfactory way. Value management in the analysed companies was given a negative assessment, both in terms of effectiveness and efficiency. Research limitations/implications: The application of this method is limited by the availability of information but only in external analyses, and it only reduces the frequency of analyses. The trend for further research is the analyses of companies representing various industry indexes and the comparative analyses of individual entities from the perspective of above average values in relation to benchmarks. Practical implications: The utilitarian value of the research study is the proposal of a method for measuring value creation which includes shareholder expectations for the needs of EBM. Moreover, the research offered an unbiased assessment of whether shareholder value in WSE WIG30 companies is created and simultaneously reflected in an increased value of shares (capitalization) to a higher degree than expected by shareholders. Originality/value: The presented study mitigates a methodological gap in the area of unbiased assessments of measuring value creation which considers shareholder expectations. The study presents empirical evidence of shareholder value creation. As yet, similar research has not been conducted for Polish and foreign capital markets.

Słowa kluczowe

EN

excess value; expectations–based management; value creation

PL

nadwyżka wartości; zarządzanie oparte na oczekiwaniach; tworzenie wartości

• Wydawca: Wydawnictwo Politechniki Śląskiej
• Czasopismo: Zeszyty Naukowe. Organizacja i Zarządzanie / Politechnika Śląska
• Rocznik: 2024
• Tom: z. 191
• Strony: 247--264
• Opis fizyczny: Bibliogr. 42 poz.

Twórcy

autor

Kaczmarek Jarosław

• Krakow University of Economics

• https://orcid.org/0000-0002-2554-814X

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