African Journal of
Business Management

  • Abbreviation: Afr. J. Bus. Manage.
  • Language: English
  • ISSN: 1993-8233
  • DOI: 10.5897/AJBM
  • Start Year: 2007
  • Published Articles: 4094

Full Length Research Paper

Company performance in Malaysia after the 1997 economic crisis: Using Economic Value Added (EVA) as a predictor

Issham Ismail
School of Distance Education, Universiti Sains Malaysia, 11800 Minden, Penang, Malaysia.
Email: [email protected]

  •  Accepted: 15 December 2010
  •  Published: 04 April 2011

Abstract

 

Malaysia was hit by an economic crisis in 1997, and the entire Southeast Asia was also gripped by an economic crisis of formidable proportions. At first, it was limited to Thailand's financial sector, but it quickly grew to engulf Malaysia, Indonesia and South Korea as well. This study evaluated the post-economic crisis period and whether or not EVA, as a measurement tool, had a relationship with company performance and whether or not EVA developed a relationship with stock return better than the traditional performance tools. The panel pool single and multiple regression, together with the common and period specific coefficients least squares analysis and White’s heteroskedasticity-consistent (corrected) variances and standard errors were used in this study. With the help of the data collected after the economic crisis in Malaysia, the study found that EVA per share could predict company performance better than traditional tools.

 

Key words: Economic Value Added (EVA), economic crisis, quantitative performance, stock return, traditional tool.