The Relationship between Market Value Added with Refined Economic Value Added and Performance Accounting Criteria in the Firms listed in the Tehran Stock Exchange

ABSTRACT: Today most analysts believe that firms should create more returns than capital costs and equities in order to create value. In this respect, what needs examination and revision is the validity of procedures used towards optimized and desirable allocation of resources in efficient and profitable activities until they ultimately lead to economic growth and attracting people’s satisfaction in appropriate application of their investments. In this research, we examine the relationship between value creation of the firms enlisted in Tehran Stock Exchange in economic terms and its value creation in accounting terms in the selected firms of Tehran stock exchange using panel data technique. In the present research, performance criteria in economic terms include refined economic value added (REVA) and market value added (MVA). The first hypothesis, the relationship between MVA and ROA has been shown that Pearson linear correlation coefficient was 0.7 and this relationship is positive and p-value or Sig is less than 0.05. So H0 is rejected; i.e. there is a linear relationship between MVA and ROE. Also in hypotheses 2 to 5 the relationship between other research variables such as ROA, RT, EPS and REVA with dependent variable MVA in which the Pearson linear correlation coefficients are 0.835, 0.599, 0.662, and 0.832 and p-value is less than 5% which shows that in above hypotheses, H0 cannot be accepted for all relationships. That is, there is a significant and positive relationship between the two variables in question.