Value Relevance of Economic and Accounting Performance Metrics During the COVID-19 Pandemic in South Africa

This chapter investigates the value relevance of economic and accounting based performance metrics for 51 nonfinancial South African listed companies during the COVID-19 pandemic. This study adopted the Driscoll and Kraay (Review of Economics and Statistics 80:549–560, 1998) nonparametric estimator strategy to avoid the problem of misspecification. The findings reveal that COVID-19 has negative implications for shareholder returns on the Johannesburg Stock Exchange (JSE). In addition, accounting-based performance indicators are irrelevant to the behaviour of shareholder returns. However, we found that economic-based metrics, namely, refined economic value added and economic value added momentum, are value relevant to the JSE. Consequently, the chapter concludes that economic-based performance metrics provide superior explanations for shareholder returns on the JSE relative to accounting-based metrics, particularly during the COVID-19 pandemic.