Alternative analyses of market value added: a case study of Thailand

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This paper examines the market value added (MVA) of listed companies in Thailand. It is known that the major drawbacks of MVA are size and market return effects. Using the two additional approaches to improve MVA study – MVA change, and the market return adjusted of three-year growth rate of MVA – the better interpretations of MVA in the Thai market during 1999–2018 are obtained. The first approach reduces the market capitalization bias, while the second diminishes the effect of the overall market trend and the stability of firm’s current performance. This study finds that when the two alternative techniques are applied, the annual results of the MVA rankings are not consistent with those of the traditional MVA and thus lead to a new insight into such indicator. Therefore, this study advances the understanding of the market value added and value creation indicators.

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    • Figure 1. The scatter plot of 2018 MVA and market value (million Baht)
    • Figure 2. The scatter plot of 2018 MVA’s change and market value
    • Figure 3. The scatter plot of 2018 three-year growth rate of market adjusted change of MVA and market value
    • Table 1. Average MVA of MVA ranking portfolios (million Baht)
    • Table 2. Industrial sectors of the top 50 MVA stocks during 1999–2018
    • Table 3. The cross-sectional regression of 2018 MVA and market value
    • Table 4. The average MVA of the MVA’s change portfolios (million Baht)
    • Table 5. The industrial sector of top 50 MVA’s change stocks during 1999–2018
    • Table 6. The cross-sectional regression of 2018 MVA’s change and market value
    • Table 7. The correlation between average MVA’s change and market return
    • Table 8. The average market return adjusted three-year growth rate of MVA
    • Table 9. The industrial sector of top 50 three-year growth rate of market adjusted change of MVA stocks
    • Table 10. The association between three-year growth rate of market adjusted change of MVA with average market value and three-year growth rate of market return