The role of market value management and liquidity management in the shareholder equity management-firm performance relationship

This research examines how Market Value Management (MVM) and Liquidity Management (LM) influence the relationship between Shareholder Equity Management and firm performance. Using data from 1166 Australian companies (2015–2023), we find that MVM and LM significantly moderate this U-shaped relationship. High MVM enhances market performance and investor expectations, while high LM ensures financial stability and flexibility. Our findings highlight the critical role of financial management in enhancing firm performance, contributing to the understanding of effective global financial strategies.