Empirical study on the effectiveness of engineering management tools: EVA and FGV

Lin Chen, Zhilin Qiao

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

Abstract

EVA and FGV are new tools for performance measurement and engineering management. The paper tests the value relevance of EVA, FGV and traditional performance measurements such as ROE, EPS, and CFOPS. Ohlson model, relative information content test and incremental information content test are used to do the work. The result of relative information test shows that FGV's relative information content is largest. It is more highly associated with corporate value than EVA, EPS, ROE, and CFOPS. Although EVA is also associated with corporate value, it is not as remarkable as EVA advocator's proposed. The result of incremental information test reveals that EVA and FGV all have significant incremental information content. It also suggests that EVA and FGV have significant incremental explanatory ability to corporate value. And FGV has more incremental explanation than EVA.

Original languageEnglish
Title of host publicationIE and EM 2009 - Proceedings 2009 IEEE 16th International Conference on Industrial Engineering and Engineering Management
Pages345-349
Number of pages5
DOIs
StatePublished - 2009
Event2009 IEEE 16th International Conference on Industrial Engineering and Engineering Management, IE and EM 2009 - Beijing, China
Duration: 21 Oct 200923 Oct 2009

Publication series

NameIE and EM 2009 - Proceedings 2009 IEEE 16th International Conference on Industrial Engineering and Engineering Management

Conference

Conference2009 IEEE 16th International Conference on Industrial Engineering and Engineering Management, IE and EM 2009
Country/TerritoryChina
CityBeijing
Period21/10/0923/10/09

Keywords

  • Engineering management
  • EVA
  • FGV
  • Performance measurement

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