Determinants of the Use of Value-based Performance Measures for Managerial Performance Evaluation

Henri Dekker, Tom L. C. M. Groot, Martijn Schoute, Eelke Wiersma

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As value-based (VB) performance measures include firms' cost of capital, they are considered more congruent than earnings measures. Prior studies, however, find that their use for managerial performance evaluation is less extensive than their presumed benefits would suggest. We examine how the importance of VB measures for evaluation varies with firms' need and managers' opportunity to manage capital costs, and find this to increase with a need for intensive asset use, delegated authority and reduced unit interdependencies. In addition, importance of intensive asset use simultaneously limits the delegation of authority, partially offsetting the increase in importance of VB measures.
TidsskriftJournal of Business Finance & Accounting
Udgave nummer9-10
Sider (fra-til)1214-1239
Antal sider26
StatusUdgivet - 2012
Udgivet eksterntJa


  • Middle-level managers
  • Partial least squares
  • Performance measurement
  • Survey
  • Value-based management