The Relationship between Corporate Governance, Tax Aggressiveness, and Economic Value Added (EVA)

Abstract

This study aims to examine the relationship between corporate governance, tax aggressiveness, and Economic Value Added using a literature review approach. Sound corporate governance is widely believed to mitigate aggressive tax practices, which in turn affects the company’s ability to generate added economic value. By reviewing international scholarly articles published in last five years, the study finds that the relationship among these three variables is complex and contextual, influenced by various mediating and moderating factors, such as corporate social responsibility and board size. These contextual elements affect how tax strategies are designed and implemented under governance structures, which ultimately shape the firm’s financial performance measured by Economic Value Added. The study offers in-depth insights into how strategic tax management and effective governance interact to influence firm value. The findings contribute theoretically and practically by informing decision-makers, investors, and regulators about the importance of integrating ethical governance and tax efficiency to achieve long-term sustainable value creation.