Impact of corporate governance practices on financial performance: evidence from non-financial sector of Pakistan

Q4 Economics, Econometrics and Finance

International Journal of Electronic Finance Pub Date : 2020-10-05 DOI:10.1504/ijef.2020.10032627

Emmanuel Aidoo, Z. Akbar, Mahwish Rafique, H. Rahman

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引用次数: 3

Abstract

This study aims to investigate the impact of corporate governance practices on the financial performance of Pakistani listed firms. For this purpose, we use the panel data of 65 non-financial listed firms from 2010 to 2017. Our framework of analysis is based on the agency and stewardship theories. We measure corporate governance practices through various gauges, including board size, board independence, CEO duality, institutional ownership, managerial ownership, ownership concentration, and foreign ownership. Applying the fixed-effect and random-effect models in a panel setting, this empirical investigation reveals that board size, institutional ownership, managerial ownership, and ownership concentration accelerate the financial performance of the non-financial sector of Pakistan. However, we could not find such evidence on CEO duality, board independence and foreign ownership. Consistent with the convergence theory, our empirical findings reveal that higher managerial ownership reduces agency cost issue and ultimately enhances the performance, profitability, and shareholder's wealth.

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公司治理做法对财务业绩的影响：来自巴基斯坦非金融部门的证据

本研究旨在调查公司治理实践对巴基斯坦上市公司财务业绩的影响。为此，我们使用了2010年至2017年65家非金融上市公司的面板数据。我们的分析框架基于代理和管理理论。我们通过各种衡量标准来衡量公司治理实践，包括董事会规模、董事会独立性、CEO双重性、机构所有权、管理层所有权、所有权集中度和外国所有权。在面板设置中应用固定效应和随机效应模型，本实证研究表明，董事会规模、机构所有权、管理层所有权和所有权集中度加速了巴基斯坦非金融部门的财务绩效。然而，在CEO二元性、董事会独立性和外资持股方面，我们却找不到这样的证据。与收敛理论一致，我们的实证结果表明，更高的管理层所有权减少了代理成本问题，并最终提高了绩效、盈利能力和股东财富。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

International Journal of Electronic Finance Business, Management and Accounting-Management of Technology and Innovation

CiteScore

1.20

自引率

0.00%

发文量

期刊介绍： IJEF publishes articles that present current practice and research in the area of e-finance. It is dedicated to design, development, management, implementation, technology, and application issues in e-finance. Topics covered include: -E-business and IT/IS investment -E-banking/m-banking strategy/implementation -Digitisation in financial supply chain -[E-]auditing, e-taxation, e-cash flow -Customer channel management -Data mining/warehousing -E-lending/e-payment/e-procurement -Cultural/social/political issues -E-trading/online auctions -Knowledge management -Business intelligence -E-government regulation -Security/privacy/trust -IT risk analysis -Human-computer interaction