Open AccessDO EMERGING MARKET FIRMS SACRIFICE ECONOMIC VALUE FOR GROWTH?
Author(s) -
Seyda Deligonul,
Jana Sacks
Publication year - 2020
Publication title -
international journal of business and applied social science
Language(s) - English
Resource type - Journals
ISSN - 2469-6501
DOI - 10.33642/ijbass.v6n2p2
Subject(s) - emerging markets , value creation , value (mathematics) , business , distress , market economy , economics , industrial organization , finance , ecology , machine learning , computer science , biology
In this article, we focus on emerging market firms, often operating with no or negative EVA rendering them financially fragile. We argue that economic distress does not necessarily drive going concern distress, nor does it drive economically unsound performance. We provide a framework for added value performance assessment and analyze emerging market firms in their growth patterns. We develop a pertinent theory to explain the observation of value loss and its relationship to some underlying factors. While emerging market firms may behave in a way in which they indeed destroy economic value, they also usually sustain their ability to deliver a going-concern premium.