The concept and measurement of creating excess value in listed companies

Abstract

The basic topic of considerations in this paper is an assessment of the creation of value for owners – in an expected and sufficient manner. It indicates that the adopted approach is based on the concept of Expectations Based Management (EBM). The author discusses in this paper the manner of developing measures for the needs of the EBM concept and assessing their usefulness in the conditions of the capital market in Poland. In particular, the aim of this paper is to assess the creation of value for owners of listed companies – in the expected and sufficient manner. From the theoretic and methodical perspective the sub–goal is to expand the field of perception of the market value added measure by introducing the concept of the excess value. At the utility perspective the sub-goal is to verify the effectiveness of excess market added value in the evaluation process of the created value to equity (value for shareholders, owners). The analysis comprises 20 listed companies (the sectors: energy, chemical industry, fuel and raw materials), whose shares are listed on the Warsaw Stock Exchange. These are the main creators and destroyers of value added. The test period covered the years 2008–2013. The article proves three research hypotheses, and the general conclusion is that excess market value added provides a more reliable description of capital market changes (companies market capitalisation) as classic market value added, taking into account owners (shareholders) expectations.