Paper Title
Empirical Comparison Of Modern Approach With Traditional Approach For Creation Of Shareholder Value In Indian Banking Sector
Abstract
This study investigates the importance of economic value added for the shareholders� value
maximization. Economic value added (EVA) is a value based performance measurement tool that helps to settle
down the conflict issues between managers and shareholders. Using a sample of 40 Indian commercial listed
Banks and using panel data with fixed effects during the period of 2001 to 2015, the findings of the study
revealed that there is a positive and significant relationship between EVA and shareholder�s value maximization
in case of public limited banks and overall Indian banks but in case of Private limited banks, DPS was found to
have significant relationship with shareholder value. The more the managers produce EVA, the more
shareholders� wealth maximization will be created in public limited banks and in case of private banks DPS has
to be focussed. The finding shows significant support for EVA and DPS, but it was found that EVA was not
reported by the Banks and is not been used by investors for their investment decisions. Thus it is recommended
for the managers to focus more attention to the criteria of EVA in evaluating shareholder�s value of banks.
Key words- Shareholder value creation, EVA, DPS, ROE