Internal value distribution and financial performance: an empirical study of JSE-listed companies in the Industrials sector

Abstract

This study examined whether internal value distribution, operationalised via the Marx Ratio, was associated with organisational financial performance in JSE-listed Industrials over the period 2014–2023. Using audited organisational data and multivariate analysis, the study examined asset-use efficiency and operating outcomes in a governance environment shaped by the King IV code. The evidence indicates a clear positive association between internal value distribution and efficiency outcomes, with a smaller but still positive association for operating performance. No credible non-linearity was detected in the dispersion range observed. When interpreted through agency and tournament mechanisms, and read with an institutional work lens, the findings suggest that credibly justified internal differentials are compatible with stronger asset utilisation in capital-intensive, interdependent production settings. The study contributes sector-specific evidence from a large emerging-market context, positions the Marx Ratio as a transparent, decision-useful complement to remuneration disclosure, and clarifies boundary conditions for practice. Limitations reflect the observational design and scope, and the study outlines directions for future research on dynamics, causal identification, and alternative distributional measures.