A Review and Synthesis of the Economic Value-Added Literature

Worthington, Andrew C.; West, Tracey

doi:10.2139/ssrn.2169802

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A Review and Synthesis of the Economic Value-Added Literature

Discussion Papers in Economics, Finance and International Competitiveness, School of Economics and Finance, Queensland University of Technology, 2000

21 Pages Posted: 3 Nov 2012

See all articles by Andrew C. Worthington

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(R)). 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.

Keywords: EVA, economic value-added, accounting performance measures

JEL Classification: M40

Suggested Citation: Suggested Citation

Worthington, Andrew C. and West, Tracey, A Review and Synthesis of the Economic Value-Added Literature (2000). Discussion Papers in Economics, Finance and International Competitiveness, School of Economics and Finance, Queensland University of Technology, 2000, Available at SSRN: https://ssrn.com/abstract=2169802 or http://dx.doi.org/10.2139/ssrn.2169802