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In this paper, prepared for a symposium on Austrian Perspectives on Business Valuation for the Journal of Business Valuation and Economic Loss Analysis I study how topics highlighted in the Austrian literature accept a financial interpretation.


In this paper I present a financial framework, known as Economic Value Added or EVA®, used to value firms and apply it to topics highlighted in the Austrian literature. In particular I contrast the market process emphasize in the Austrian literature with the neoclassical firm profit maximization and the role of Kirzner’s entrepreneurial alertness. Then I show how these micro topics can be aggregated into macro issues such as the Cantillon Effect, an aggregate average period of production, and the impact of country risk into value creation.

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