An Empirical Test of a Resources Deployment Portfolio (RDP) Approach to Business Group ROE Decomposition
| Autor: | Li-Ling Yang, David M. Chen |
|---|---|
| Rok vydání: | 2009 |
| Předmět: |
Economics and Econometrics
Financial economics Equity (finance) DuPont analysis Microeconomics Empirical research jel:G1 Return on equity jel:G2 jel:G3 Business analysis Economics Portfolio Valuation DuPont decomposition resources deployment portfolio research and development Market value Finance Valuation (finance) |
| Zdroj: | Review of Pacific Basin Financial Markets and Policies. 12:695-720 |
| ISSN: | 1793-6705 0219-0915 |
| Popis: | This study proposes a resources deployment portfolio (RDP) approach to decomposing return on equity (ROE) for business analysis. The five components are return on operating equity (RoOE), return on financial equity (RoFE), return on other equity (RoXE), return on influencing equity (RoIE), and R&D intensiveness (R&DI). Empirical results demonstrate that RDP decomposition offers substantial improvement over DuPont decomposition in explaining market valuation. Confirming the perceived sustainability, RoOE is the most consistently significant component for both long-term and short-term value creation. In line with prior research findings, R&DI is generally significant in contributing to long-term value creation but is not significant for short-term value creation. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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