Value Added from the Perspective of Econophysics

Ihor Hurnyak; Nataliya Struk; Aleksandra Kordonska

doi:10.18778/1508-2008.24.35

Authors

Ihor Hurnyak Associate Professor, Ivan Franko National University of Lviv, Faculty of International Relations, Department of International Economic Analysis and Finance, Lviv, Ukraine https://orcid.org/0000-0003-0926-2456
Nataliya Struk D.Sc., Professor, Ivan Franko National University of Lviv, Faculty of Economics, Department of Accounting and Auditing, Lviv, Ukraine https://orcid.org/0000-0002-1933-265X
Aleksandra Kordonska Ph.D., University of Warmia and Mazury in Olsztyn, Institute of Political Science, Olsztyn, Poland https://orcid.org/0000-0002-5316-9630

DOI:

https://doi.org/10.18778/1508-2008.24.35

Keywords:

accounting, business, economic forces, economic value added, econophysics

Abstract

The production, or value added, approach to GDP involves calculating an industry or sector’s output and subtracting its intermediate consumption (the goods and services used to produce the output) to derive its value added. The value added at the macro level depends on business efficiency. It reflects an increase in value that a business creates by undertaking the production process. We assumed that the market creates thousands of vibrating energies, coming from other enterprises, with different frequencies. The purpose of this article is to verify whether the econophysics approach could be successfully used to assess a business from the perspective of the interaction between economic forces. Thus, we propose that the term ‘value added’ be understood as a certain amount of accumulated energy of enterprises that comes from the interaction of basic economic forces and economic vibrating forces of accounting. Using regression models, we show the influence of basic forces, like debt and the stock market, and vibrating ones (i.e., accounts payable, accounts receivable, inventory) on the economic value added by testing US, European, and emerging markets. We confirmed the relevance and appropriateness of the econophysics approach to estimating the economic value added.

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