Archive for January, 2014

In this study stock return (SR) is a dependent variable. Stock return is the total earning derived from investment in a given period divided on investments made in the period. According to Davvani, stock return is the change in the value of the shares in the end of given period, compare to begging of the same period, that this change in value is due to the change in the price plus any dividends paid.
According to Jahankhani and Sajjadi the criteria related to determine companies value and managers performance can be divided into two categories: (i) Accounting measures (ii) economic measures.
In economic models, the firm value is a function of profitability power, potential investment, and the difference between rate of return and cost of capital.
In recent years, various concepts have been proposed for measuring the residual income. Use of market value and book value for calculating the cost of capital has had a dramatic difference in results. Economic performance evaluation measures involve; economic value added (EVA), refined economic value added (REVA), EVA momentum, cash value added (CVA), and market value added (MVA). The most of economic measures involve; economic value added (EVA), refined economic value added (REVA), market value added (MVA), cash value added (CVA), and free cash flow (FCF). In this study economic value added (EVA), refined economic value added (REVA), and EVA Momentum selected as economic performance measures.
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EVALUATION OF COMPANY PERFORMANCE WITH ACCOUNTING AND ECONOMIC CRITERIA: InformationKim examined the relative and incremental information content of EVA and traditional performance measures( earning and cash flow) with hospitality firm value. Relative information content test show earning is more beneficial than cash flow in explanation the market value of hospitality firms. EVA has very small descriptive itself. The incremental information content test indicates that EVA compares to earnings and cash flow, makes only a marginal contribution to information content. Generally, the results do not uphold the suggestion that EVA is better than earning and cash flow in relationship to the market value of equity. Yaghoob nejad & Akaf studied the relationship between EVA, residual income (RI), return on sales (ROS), return on investment (ROI), and market value added (MVA) in Tehran stock exchange (TSE). Their result revealed there is meaningful relationship between EVA, RI, ROS, and ROI with MVA. In the total firms, the strongest relationships were ROS, EVA, ROI, and RI with MVA respectively. In chemical industries this relation was ROS, EVA, RI, and ROL with MVA respectively.
Kyriazis and Anastassis in a research examined the relative explanatory power of economic value added (EVA) with share returns and market value of company, compared to recognized variables of accounting; net income (NI) and operating income (OI), in the context of a small European developing market, namely the Athens Stock Exchange (ASE). The results do not support the claim of Stern Stewart that EVA is more associated with stock return and market value. Relative information content tests show that net income (NI) and operating income (OI) have more correlated with stock return and market value than EVA. Moreover, the results reveal that EVA does not outperform relationship significantly to the firm’s market value added compared to net income (NI) and operating income (OI).
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Stewart first provided evidence of the correlation between EVA and Market Value Added (MVA). Lehn and Makhija analyzed the correlation degree between various performance measures and share market returns. The consequence point out that there are most highly associated between EVA and share return returns and that this correlation was slightly better than with traditional performance measures such as ROA, ROE and ROS.
Milunovich and Tseui found that MVA is more highly correlated with EVA than with EPS, EPS growth, ROE, FCF or FCF growth. Lefkowitz examined the US firms and result of the study shown EVA is better associated with share return than conventional performance criterions. He discovered that EVA is rationally dependable guide to know the value of the company.
Isa and Lo said EVA has gained significant attention as an alternative to the traditional accounting measures for assessing corporate performance due to its transparency and capacity to provide more vital information. It is hoped that the introduction of this tool will help investors in Malaysia make better investment and allocation of resource decisions. Zoolhelmi studied the relation between EVA and stock return. He had chosen 78 industrial product companies from main board of the Kuala Lumpur Stock Exchange (KLSE). He fined there is no added advantage in EVA compared to traditional methods as a performance measurement.
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EVALUATION OF COMPANY PERFORMANCE WITH ACCOUNTING AND ECONOMIC CRITERIA: IntroductionNowadays, according to the company’s development and the separation of ownership from management, the discovery of appropriate criterion has become increasingly important for evaluating managers and company’s performance. According to Jahankhani & Sohrabi, in order to ensure optimal allocation of limited resources, evaluating of the companies’ performance is vital. Suitable criteria for evaluating performance of the enterprise or shareholder value must be used, if the value of the company does not propel toward real value, the funds are not allocated properly.
Performance of the Company can be calculated by using different methods. The criteria related to determine a company’s value and managers’ performance can be divided into two categories: (i) Accounting measures (ii) Economic measures. In the accounting model, firm value is a function of various criteria such as profit, earning per share (EPS), rate of profit growth, return on equity (ROE), return on assets (ROA), divided per share (DPS), book value (BV), operational cash flow (OCF), return on sales (ROS), and shares of supply and demand. In the economic model, firm value is a function of power of asset profitability, potential investors, and difference between rate of return and weighted average cost of capital (WACC) (Jahankhani & zariffard, 1995). The most of economic measures involve: economic value added (EVA), refined economic value added (REVA), market value added (MVA), cash value added (CVA), and free cash flow (FCF) (Pouyanfar, Rezaee, & Safabakhsh, 2010).
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Entrepreneurship in Greece: Policy RecommendationsHowever, the policies that have been proposed by the IMF and have been applied in Greece so far, have increased tax rates, changed more than once the employment and insurance status, “froze” market psychology, due to public and private sector wage cuts and did almost nothing to lessen bureaucracy. It also striking that wage cost is not considered an important barrier by business owners. Many businesses have cut wages and fired personnel, in an attempt to minimise costs and escape closure, but this is due to the fact that businesses themselves cannot change any of the important barriers they face.
Another research on the same topic was carried out by the World Economic Forum in 2010. From a list of 15 factors, respondents were asked to select the five most problematic for doing business in their country, and to rank them between 1 (most problematic) and 5. From Table 18 again we notice that most barriers are related with the state. The most problematic factor is government bureaucracy (27.2%), followed by corruption (14%) restrictive labor regulations (12%), policy instability (11.5%) and tax regulations (11.1%). Access to financing was also considered a problematic factor for businesses. Finance challenges

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Many of the business closures mentioned above are a result of the barriers met by Greek enterprises. Barriers are met both during the start up phase as well during their daily operation. Following there is going to be a reference on various researches made on the topic.
In a research carried out by the World Bank on 2008, about the ease of starting a business, Greece was in the last position among 58 countries. On the same research for 2011, it was in the 101th position from 183 countries. This research evaluated the ease of starting a business based on the following aspects: Starting a Business, Dealing with Construction Permits, Getting Electricity, Registering Property, Getting Credit, Protecting Investors, Paying Taxes, Trading Across Borders, Enforcing Contracts and Resolving Insolvency.
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Entrepreneurship in Greece: Employment by Size ClassTable 10 presents data concerning the number of employees that work in each size class, for the seven European countries. The last column presents the total private sector workforce. The largest number of employees was recorded in Germany (22.1 million), followed by the UK (18.1 million), France (15.1 million), Spain (14.2 million), Portugal (3.3 million), Sweden (2.8 million) and finally Greece (2.6 million).(Note 1) In order to examine employment of each size class in more detail, it is useful to look at percentages, as presented in Table 11 and Figure 8. Micro enterprises in Greece are responsible for the 58.2% of total private sector employment. This percentage is much higher than all other countries and highlights the importance of micro enterprises in the economy. Large enterprises in Greece occupy 13.6% of private sector workforce, which is the lowest percentage of the seven countries. The largest percentage of large enterprises employment is met in the UK (45.9%), followed by Germany (39.6%), France (39.5%), Sweden (36.3%), Spain (22.4%) and Portugal (18.9%).
Having examined Greek entrepreneurship data and structural business statistics, it is useful to see the country’s business prospects. Development of the humanity

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In order to have a better picture of the Greek business sector, following there is going to be a presentation of Greek business demographic data. Data for the six other European countries previously used will be presented as well. These data come from the OECD, but they concern the year 2007. Despite the six year period since then, these statistics can still offer a good insight in the Greek business sector.
The data presented concern the following aspects:
1)    Enterprises by size class
2)    Value Added by size class
3)    Employment by size class
The OECD uses 5 size classes, all measured according to the number of employees:
a)    1-9 (micro enterprises)
b)    10-19 (small enterprises)
c)    20-49 (small enterprises)
d)    50-249 (medium enterprises)
e)    250+ (large enterprises)
The first 4 categories are called Small Medium Enterprises (SMEs).
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Entrepreneurship in Greece: Established Business Ownership RateThe status and attitudes towards entrepreneurship in Greece can be examined from the data gathered by the Global Entrepreneurship Monitor (GEM). The Global Entrepreneurship Monitor project is an annual assessment of entrepreneurial activity, aspirations and attitudes across 85 countries. The data collected by GEM is ‘harmonized’, so as to facilitate cross-national comparisons. In order to make comparisons with other European countries, the Greek data will be presented along with the data for six other European countries: Sweden, Portugal, Spain, France, the United Kingdom and Germany. Five main indicators will be analysed:
1)    Established Business Ownership Rate
2)    Total early-stage Entrepreneurial Activity
3)    Necessity-Driven Entrepreneurial Activity
4)    Entrepreneurial Intention
5)    Fear of Failure Rate Public Service

According to GEM, Established Business Ownership Rate refers to the percentage of 18-64 population who are currently owner or manager of an established business, i.e. owning and managing a running business that has paid salaries, wages, or any other payments to the owners for more than 42 months. The rates for the seven countries are presented in Table 1. By looking at Table 1, we can see that Greece clearly has the highest rate of established business owners from the seven countries compared (available data for Greece start on 2003).
The percentage of business owners has increased from about 6.5% of the population on 2004, to almost 15.8% on 2011.
Figure 1 presents the mean value for the seven countries, for the 11 year period. Greece has the highest mean value of established business ownership for the 11 year period (12.9%), followed by Spain (7%). The country with the lowest mean value is France (2%).
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The last two decades have witnessed a wealth of studies analyzing the determinants of entrepreneurship and some of these studies are theoretical (Holmes et al, 1990), while others are empirical (Evans et al, 1989). For instance, Acs & Varga studied eleven countries and found that entrepreneurship has a positive significant effect on economic development.
However, entrepreneurship has not found a proper place in mainstream empirical economic research on the sources of economic growth (Wong & Autio, 2005). Although many researches have been conducted theoretically and descriptively on how entrepreneurship affects the economy (Porter, 1990; Lumpkin & Dess, 1996), there is lack of evidence based on empirical data. This is partially due to the difficulty in defining the role of the entrepreneur and formalizing its measurement for empirical modelling. Wennekers & Thurik synthesized these disparate strands of the literature to construct an operational framework linking entrepreneurship and economic growth. They tried to highlight the multiple role of the entrepreneur, beyond that of the innovator, that includes not only something new but also a new entry in the market. Electronic commerce

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