Identification of Industrial-Enterprise-Value Drivers in the Czech Republic

conference paper

English

In line with the current thinking, we define value drivers as all factors that influence the performance of a company and its value. Woodcock defines value drivers as all internal and external mechanisms capable of exerting a creative or a destructive influence on a company. Similarly, Rappaport, Copeland, Koller, Murrin and Scarlet describe value drivers as any variable affecting the value of a company. By identifying these value drivers, the owners and managers, as well as educational institutions and government administration agencies, are able to focus on those factors that stimulate economic development of industrial companies and the entire society, while increasing their competitive potential. The intent of this article is to identify those quantitative value drivers that affect performance of industrial companies in the Czech Republic. The parameters used to measure company performance were the return on equity (ROE) and the return on assets (ROA). An analysis of the two aggregate performance indicators, i.e. ROE and ROA simulates, in a simplified manner, the differences between the shareholder and the stakeholder interests in managing a company. The principle method in the study was a gradient boosting method introduced by Friedman (1999). In their identification of potential value drivers, the authors reviewed research studies from the period of 1966-2010 and tested 44 financial indicators. The results of their analysis will help assess the differences in vested interests between the shareholders and the stakeholders that may cause a conflict between them.

Value drivers, company performance, shareholder interests

REŽŇÁKOVÁ, M.; STRNADOVÁ, M.; KARAS, M.

2012

9. 11. 2012

Ostrava

978-80-87294-33-8

Congress Proceedings

38

38

6