Economic Value‐Added: A Review of the Theoretical and Empirical Literature
Abstract
With increasing pressure on firms to deliver shareholder value, there has been a renewed emphasis on devising measures of corporate financial performance and incentive compensation plans that encourage managers to increase shareholder wealth. One professedly recent innovation in the field of internal and external performance measurement is a trade‐marked variant of residual income known as economic value‐added (EVA). This paper attempts to provide a synoptic survey of EVA's conceptual underpinnings and the comparatively few empirical analyses of value‐added performance measures. Special attention is given to the GAAP‐related accounting adjustments involved in EVA‐type calculations.
Citation
Worthington, A.C. and West, T. (2001), "Economic Value‐Added: A Review of the Theoretical and Empirical Literature", Asian Review of Accounting, Vol. 9 No. 1, pp. 67-86. https://doi.org/10.1108/eb060736
Publisher
:MCB UP Ltd
Copyright © 2001, MCB UP Limited