This paper studies the relationship between the supervision mechanism, incentive mechanism of corporate governance and corporate value, especially the substitution effect between these two mechanisms and its impact on economic added value (EVA) with data of 1250 listed companies from 2004 to 2007 in Shenzhen and Shanghai. The results show that there exists a substitution effect between the supervision mechanism and incentive mechanism. The authors argue that we can enhance corporate value through the combination of these two governance mechanisms.