Research

The effects of adopting the Balanced Scorecard on shareholder returns

Many firms have adopted the Balanced Scorecard (BSC) as a way to implement strategy and measure firm performance. This paper uses a long-horizon event study methodology to examine the relationship between BSC adoption and shareholder returns. Using a matched pair design, we show that firms who adopt the BSC significantly outperform firms that do not adopt the BSC over a three year period beginning with the year of adoption. Our results are robust for different matching criteria. There is also evidence that firms earn greater excess returns after adoption of the BSC than before. These results provide strong evidence that the BSC is an effective strategic management tool that leads to improved shareholder returns.

Publication Information
Article Title: The effects of adopting the Balanced Scorecard on shareholder returns
Journal: Advances in Accounting (Jun, 2008)
Vol. 24, Issue 1
Author(s): Crabtree, Aaron D;  DeBusk, Gerald K.
Researcher Information
    
Crabtree, Aaron D
Crabtree, Aaron D
Director of the School of Accountancy
Accountancy
CoB 435 B
P.O. Box 880488
University of Nebraska-Lincoln
Lincoln, NE 68588-0488, USA
Phone: (402) 472-2337
Fax: (402) 472-4100
acrabtree2@unl.edu