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The relationship of financial performance and stock returns in countries under economic sanctions

Author

Listed:
  • Ali Akbar Gholizadeh

    (Bu Ali Sina University)

  • Davood Jafari Seresht

    (Bu Ali Sina University)

  • Zahra Bayat

    (Bu Ali Sina University)

  • Leyla Jabari

    (Bu Ali Sina University)

Abstract

Accounting and economic evaluation criteria play an important role in assessing the performance of the firms. Choosing proper criteria for such evaluation has been reported in reviews of literature on financial management. The present study aims to find the relationship between economic value added (EVA) as the criterion for evaluating economic performance, and return on assets and stock returns as indicators of economic accomplishment. For this, our statistical community includes 1104 companies from Iran (between 2011 and 2018) and 1058 companies from Venezuela (between 2011 and 2017). Results of analysis showed that there was a reverse significant relationship between EVA and stock returns in two stock exchanges of Iran and Venezuela because of the significance level less than 0.05 and coefficient by − 1.2. On the other hand, there was no such relationship observed between EVA and return on assets because the significance level was found higher than 0.05.

Suggested Citation

  • Ali Akbar Gholizadeh & Davood Jafari Seresht & Zahra Bayat & Leyla Jabari, 2023. "The relationship of financial performance and stock returns in countries under economic sanctions," Journal of Asset Management, Palgrave Macmillan, vol. 24(1), pages 16-26, February.
    • Handle: RePEc:pal:assmgt:v:24:y:2023:i:1:d:10.1057_s41260-022-00300-1
    DOI: 10.1057/s41260-022-00300-1
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    References listed on IDEAS

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    1. Adil Pasha & Muhammad Ramzan, 2019. "Asymmetric impact of economic value-added dynamics on market value of stocks in Pakistan stock exchange, a new evidence from panel co-integration, FMOLS and DOLS," Cogent Business & Management, Taylor & Francis Journals, vol. 6(1), pages 1653544-165, January.
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