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.
Cordeiro, James J. and Kent, D. Donald Jr., "Do EVA ™ Adopters Outperform their Industry Peers? Evidence from Security Analyst Earnings Forecasts" (2001). Business-Economics Faculty Publications. 12.
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