Economic Value Added (EVA) for Performance Evaluation of Public Organizations
| Autor: | Ali Farazmand, Meena Subedi |
|---|---|
| Rok vydání: | 2020 |
| Předmět: |
business.industry
05 social sciences Accounting Economic Value Added Public or state-owned enterprises (SOE PE) Firm performance Investment (macroeconomics) Organizational performance Unobservable Article 0506 political science Economic value added Return on equity 0502 economics and business 050602 political science & public administration Business Management and Accounting (miscellaneous) Metric (unit) Endogeneity Organizational performance earnings before taxes business Law 050203 business & management Public finance |
| Zdroj: | Public Organization Review |
| ISSN: | 1556-5068 |
| DOI: | 10.2139/ssrn.3861762 |
| Popis: | This study tests whether economic value added (EVA) as a performance evaluation metric incentivizes public administrators to increase the performance of public organizations. It utilizes data from Wind Info Database (WIND) and finds that the adoption of EVA as a performance evaluation metric incentivizes public administrators to increase the overall efficiency of the public organizations under study. The study suggests that public administrators make prudent investment and operating decisions after the adoption of EVA as their performance evaluation metric, thereby increasing the overall organizational performance. Using 2274 firm-year observations for the period from 2009 to 2010 in China, this paper uses first-difference change analysis methodology that takes care of firm-level unobservable heterogeneities and addresses endogeneity concerns, thereby producing robust results. The change analysis setting has been used in prior studies to find the effect of certain treatment (e.g., Lyons et al. 2001; Kerr et al. 2006; Pal and Pohit 2014). Lyons et al. (2001) argue that the change analysis focuses on studying differences before and after services (i.e., the presence and absence of treatment) that are received. In our research design, the treatment is adoption of EVA by the SASAC, which occurred in year 2010. |
| Databáze: | OpenAIRE |
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