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The purpose of the present study is to re-examine the link between EVA ™ adoption and firm performance, using security analyst earnings forecasts. These forecasts, we argue, function as a proxy for firm performance that usefully supplements other accounting and stock market measures. We begin by reviewing some of the literature on EVA™, noting claims for strengths and weaknesses of that performance measure and management system. We then make the case for why security analyst earnings forecasts are a useful performance measure for testing the performance effects of EVA TM adoption. We test our hypothesis using Stern Stewart's sample of firms in 1997.

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