Document Type

Article

Publication Date

1-1-2011

Abstract

This article presents estimates of firm and industry fixed-effects on profit rates for large US corporations, using both Economic Value Added (EVA), the popular measure of profits produced by Stern Stewart and Company, as well as simple (unadjusted) accounting measures as the dependent variable. We find that the improvement in explanatory power of the fixed-effect model is substantially greater when using EVA than has been documented with alternative measures.

Comments

Copyright © 2011 Taylor & Francis. This is the pre-peer reviewed version of an article published in Applied Economics Letters, which has been published in final form at http://dx.doi.org/10.1080/13504851003761756.

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