Firm Value Creation Patterns in India

Abstract

Maximizing the total value of the firm — that is, the sum of the market values of the equity, debt and any other contingent claims outstanding on the firm — is fast gaining popularity in India. Value maximization, as an objective function that will guide managers in making the optimal tradeoffs

Using a sample of 1000 companies, classified into sixteen industries, two industry sectors, seven BSE listing groups and six geographical regions, this paper investigates the value creation patterns of Indian firms and to ascertain whether there are significant differences across industries, industry sectors, BSE listing groups and geographical regions

Keywords: Value Creation, Corporate performance measures

JEL Classification: G00, J33, L21, M40, M52