Abstract:

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.