The Effect of Corporate Governance on the Relationship between Economic Value Added and Created Shareholder Value

The goal of the present research is to study the effect of corporate governance mechanisms on the relationship between economic value added and return earned by the shareholders. Thus, the data of 94 companies for the period between 2004 and 2011 were collected and analyzed statistically. This study is applied regarding the goal. It is descriptive and correlation type regarding its administration. Also in testing the research hypotheses we have used multiple regression models. The results showed that economic value added has a positive relationship with the created shareholder value. Also the findings showed that the reinforcement of leadership system plays an important role in reducing the difference between economic value added and the created shareholder value. In other words, the criteria for corporate governance mechanisms leave a negative effect on the difference between economic value added and the created shareholder value.