Accounting versus Economic Based Measures of Performance and the Share Market Value: The Evidence of the Industrial Listed Firms at Abu Dhabi Stock Exchange

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Abstract: The study investigates the effect of accounting and economic based measures of performance on the share market value of the listed manufacturing firms at Abu Dhabi Stock Exchange. It objects for determining whether accounting or economic based measures of performance are affecting the share market value, and which group of measures has more effect. For the purposes of the study, the effect of two independent variables had been tested in their effect on share market value. The first group is the accounting based measures, where earnings per share, return on assets, and return on equity, are the selected components of this group. The second group of measures is the economic based measures, where the market value added, and the economic value added are used within this group. The cross sectional data had been collected from the annual reports issued by these firms over the period 2014-2016. Using the multiple linear regression method in the analysis and hypotheses testing, each of both groups of variables had been found affecting the share market value. Moreover, the study found that grouping all measures in one group leads to more significant effect on share price, than individual separated groups. As additional unrelated analysis to hypotheses, when each measure, using the simple linear regression method, is tested individually in its effect on the share market price, only the market value added found having a significant effect on share market value of listed firms at Abu Dhabi Stock Exchange.

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / 2224-2899, Volume 15, 2018, Art. #35

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Mohammed Ibrahim Obeidat, Nadeen M. A. Darkal, "Accounting versus Economic Based Measures of Performance and the Share Market Value: The Evidence of the Industrial Listed Firms at Abu Dhabi Stock Exchange," WSEAS Transactions on Business and Economics, vol. 15, pp. 363-374, 2018, DOI:
Mohammed Ibrahim Obeidat, Nadeen M. A. Darkal. Accounting versus Economic Based Measures of Performance and the Share Market Value: The Evidence of the Industrial Listed Firms at Abu Dhabi Stock Exchange. WSEAS Transactions on Business and Economics. 2018;15:363-374.
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