An Empirical Study Of The Value-Relevance Of EVA Momentum

EVA Momentum is an index which based on and improved from the Economic Value Added, however, the ranking based on EVA and EVA Momentum are very different from each other, which causing extensive discussions of academics and practitioners. The research on EVA Momentum in China is limited now, and this paper will sample listed companies, to have a research on EVA momentum under conditions of China’s capital market value of relevance, and to find out whether EVA momentum has better correlation than other indexes or not.Existing studies on the economic value added focused on traditional indicators of economic value added and value relevance contrast, some studies suggest that the correlation of economic value added index value than traditional low correlation, there are also studies support the opposite view. The reason for the correlation between economic value added there are different views may calculate the economic value added complexity, time-consuming nature related. This article will know the method to calculate the central rate of autonomic computing economic value added economic value added of listed companies and the economic value added momentum, and then study the economic value added momentum based on the value relevance.This article uses the2007-2012Shanghai and Shenzhen A-share non-financial listed companies sample, using pricing models and revenue models a combination of economic value added momentum examine the value of the correlation, the study found the economic value added momentum and stock price, stock gains were significant positive correlation between the value, but weaker than the other indicators of economic value added per share; and economic value added momentum on the ability to explain stock returns is significantly stronger than other economic value added deflator index, played a good exclude the role of economic value added of scale.Innovation and research value as:Firstly, different from distinguished based on accounting profit targets or indicators of total value creation for the company to study the efficiency of this article from the perspective of value creation for our research and analysis of listed state-owned companies, providing evaluation another perspective of the performance of listed companies.Secondly, the study complements the momentum correlation between the value of the lack of domestic economic value added. For the study of China’s economic growth momentum is still in the introduction phase value, and more focused on economic value added momentum for the introduction stage, the paper studied the economic value added momentum and the value of listed companies in China relevance.