The effects of economic value added and intellectual capital on the firms market value: Evidence from Iran

The purpose of this research is to study and compare the explanatory power of economic value added and intellectual capital in determining the firm's value. This research uses the Ohlson valuation method. Statistical universe containing accepted companies in Tehran Stock Exchange (TSE) in period from 2005 to 2007. In order to test the hypotheses and comparing the explanatory power of model we used R² coefficient and adjusted R² coefficient to test hypotheses and comparing explanatory power of models.

The results show that residual income calculated in accounting method, explain the value of the firms better than economic value added. Also, results show that the determinant models of the firm's value that intellectual capital variables have been added to theme, have a higher explanatory power.