An Empirical Study of Value Creation Criteria : Case of Iran

Investors, creditors and managers always look for an on-time and reliable performance measuring index, with the goal of evaluating value creation. The aim of this study is to arrive at economic and accounting measures which would indicate the value created by the firms in Iran. After reviewing the literature, hypotheses indicating the relationship between the selected measures and value creation were formulated. Then the hypotheses were tested by analyzing the performance of 92 companies listed in the Tehran Stock Exchange (TSE) for the financial years 2004-2008. The results of the study reveal that there is a meaningful relation between accounting measures like Return on Investment (ROI) and Earnings Per Share (EPS) and shareholder value creation