IDEAS home Printed from https://ideas.repec.org/a/aib/ibtjbs/v12y2016i2p1-24.html
   My bibliography  Save this article

Development Financing And Economic Governance: Analysis Of The Liquidity Crisis And Circularity Debts In Pakistan

Author

Listed:
  • Dr.Muhammad Irfan Khan

    (Iqra University Main Campus, Karachi)

  • Dr.Muhammad Ayub Khan Mehar

    (Iqra University Main Campus, Karachi)

  • Dr.Athar Iqbal

    (Iqra University Main Campus, Karachi)

Abstract

Purpose This paper is based on the models derived by the researchers to explain the patterns of corporate governance, firms’ financial policies and liquidity position.Methodology A deductive approach has been adopted to reconcile and examine the different models of corporate governance and firms’ financial policies.Findings The study showed that corporate savings is a good predictor of the macro level investment in a country.The magnitude of national investment will increase by improvement in corporate savings.In fact the corporate savings indicate the expansion in business activities which may be an indicator of the trust and confidence of private sector.On the other hand it explains the financial health of corporate sector, which may provide the significant portion of tax revenue to the government for developing projects in public sector.The study has concluded that corporate governance is a significant variable in determining the liquidity and circularity debts.In this way corporate governance becomes a crucial determinant of the national investment.ImplicationsThe bad corporate governance may deteriorate the investment activities at national level, which may damage the economy for a longer term.This study also indicates that capital structure and the patterns of ownership play important role in the determination of corporate governance of an institution.

Suggested Citation

  • Dr.Muhammad Irfan Khan & Dr.Muhammad Ayub Khan Mehar & Dr.Athar Iqbal, 2016. "Development Financing And Economic Governance: Analysis Of The Liquidity Crisis And Circularity Debts In Pakistan," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 12(2), pages 1-24.
    • Handle: RePEc:aib:ibtjbs:v:12:y:2016:i:2:p:1-24
    DOI: https://doi.org/10.46745/ilma.ibtjbs.2016.122.1
    as

    Download full text from publisher

    File URL: http://ibtjbs.ilmauniversity.edu.pk/journal/jbs/12.2/1.pdf
    Download Restriction: no
    File URL: https://libkey.io/https://doi.org/10.46745/ilma.ibtjbs.2016.122.1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Myers, Stewart C. & Majluf, Nicholas S., 1984. "Corporate financing and investment decisions when firms have information that investors do not have," Journal of Financial Economics, Elsevier, vol. 13(2), pages 187-221, June.
    2. Stewart C. Myers & Nicholas S. Majluf, 1984. "Corporate Financing and Investment Decisions When Firms Have InformationThat Investors Do Not Have," NBER Working Papers 1396, National Bureau of Economic Research, Inc.
    3. Singh, A. & Hamid, J., 1992. "Corporate Financial Structure in Developing Countries," Papers 1, World Bank - International Finance Corporation.
    4. Zheka Vitaliy, 2010. "The impact of corporate governance practices on dynamic adjustment of capital structure of companies in Ukraine," EERC Working Paper Series 10/07e, EERC Research Network, Russia and CIS.
    5. Pedro J. García‐Teruel & Pedro Martínez‐Solano & Juan Pedro Sánchez‐Ballesta, 2009. "Accruals quality and corporate cash holdings," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 49(1), pages 95-115, March.
    6. Oliver E. Williamson, 2005. "The Economics of Governance," American Economic Review, American Economic Association, vol. 95(2), pages 1-18, May.
    7. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    8. P. J. Lund & K. Holden, 1968. "An Econometric Study Of Private Sector Gross Fixed Capital Formation In The United Kingdom, 1923–1938," Oxford Economic Papers, Oxford University Press, vol. 20(1), pages 56-73.
    9. Vitols, Sigurt, 1995. "Corporate governance versus economic governance: banks and industrial restructuring in the US and Germany," Discussion Papers, Research Unit: Economic Change and Employment FS I 95-310, WZB Berlin Social Science Center.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Barakat, Mounther-Hussein & Rao, Ramesh-P, 2003. "The role of taxes in capital structure: evidence from taxed and non-taxed Arab economies," MPRA Paper 25472, University Library of Munich, Germany, revised Aug 2006.
    2. A. Ganesh-Kumar & Kunal Sen & Rajendra R. Vaidya, 2002. "Does the source of financing matter? Financial markets, financial intermediaries and investment in India," Journal of International Development, John Wiley & Sons, Ltd., vol. 14(2), pages 211-228.
    3. Singh, Ajit & Singh, Alaka & Weisse, Bruce, 2002. "Corporate governance, competition, the new international financial architecture and large corporations in emerging markets," MPRA Paper 53665, University Library of Munich, Germany.
    4. Sanjiva Prasad & Christopher J. Green & Victor Murinde, 2005. "Company Financial Structure: A Survey and Implications for Developing Economies," Chapters, in: Christopher J. Green & Colin Kirkpatrick & Victor Murinde (ed.), Finance and Development, chapter 12, Edward Elgar Publishing.
    5. Ajit Singh, 2003. "Competition, corporate governance and selection in emerging markets," Economic Journal, Royal Economic Society, vol. 113(491), pages 443-464, November.
    6. Houcine, Asma, 2017. "The effect of financial reporting quality on corporate investment efficiency: Evidence from the Tunisian stock market," Research in International Business and Finance, Elsevier, vol. 42(C), pages 321-337.
    7. Guanqun Tong & Christopher Green, 2005. "Pecking order or trade-off hypothesis? Evidence on the capital structure of Chinese companies," Applied Economics, Taylor & Francis Journals, vol. 37(19), pages 2179-2189.
    8. Amit Hedau & Shailender Singh & Huwati Janor, 2018. "Determinants Of Capital Structure – A Sector Specific Approach," Romanian Economic Business Review, Romanian-American University, vol. 13(4), pages 14-30, december.
    9. Sanjiva Prasad & Christopher J. Green & Victor Murinde, 2001. "Company Financing, Captial Structure, and Ownership: A Survey, and Implications for Developing Economies," SUERF Studies, SUERF - The European Money and Finance Forum, number 12 edited by Morten Balling, May.
    10. Greiner, Adam J., 2017. "An examination of real activities management and corporate cash holdings," Advances in accounting, Elsevier, vol. 39(C), pages 79-90.
    11. Demirguc-Kunt, Asli & Maksimovic, Vojislav, 1999. "Institutions, financial markets, and firm debt maturity," Journal of Financial Economics, Elsevier, vol. 54(3), pages 295-336, December.
    12. Sevcan Yesiltas, 2009. "Financing Constraints and Investment: The Case of Turkish Manufacturing Firms," 2009 Meeting Papers 874, Society for Economic Dynamics.
    13. Lu, Yao & Zhan, Shuwei & Zhan, Minghua, 2024. "Has FinTech changed the sensitivity of corporate investment to interest rates?—Evidence from China," Research in International Business and Finance, Elsevier, vol. 68(C).
    14. Khémiri, Wafa & Noubbigh, Hédi, 2020. "Size-threshold effect in debt-firm performance nexus in the sub-Saharan region: A Panel Smooth Transition Regression approach," The Quarterly Review of Economics and Finance, Elsevier, vol. 76(C), pages 335-344.
    15. Bo-Hung Chiou & Shen-Ho Chang, 2020. "Influence of Investment Efficiency by Managers and Accounting Conservatism on Idiosyncratic Risks to Investors," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 10(1), pages 1-8.
    16. Asmund Rygh & Gabriel R. G. Benito, 2018. "Capital Structure of Foreign Direct Investments: A Transaction Cost Analysis," Management International Review, Springer, vol. 58(3), pages 389-411, June.
    17. Ralph de Haas & Sergei Guriev & Alexander Stepanov, 2022. "State Ownership and Corporate Leverage Around the World," SciencePo Working papers Main hal-03878686, HAL.
    18. Jaime Hurtubia & Claudio Sardoni, 2011. "Policy Implications of Using Audits to Detect Bank Insolvencies," Working Papers Central Bank of Chile 651, Central Bank of Chile.
    19. Hyun, Jeong-Hoon & Kim, Natalie Kyung Won & Shin, Jae Yong, 2024. "Politically connected outside directors and the value of cash holdings," Finance Research Letters, Elsevier, vol. 62(PA).
    20. Chan-Jane Lin & Tawei Wang & Chao-Jung Pan, 2016. "Financial reporting quality and investment decisions for family firms," Asia Pacific Journal of Management, Springer, vol. 33(2), pages 499-532, June.

    More about this item

    Keywords

    no keywords;

    JEL classification:

    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aib:ibtjbs:v:12:y:2016:i:2:p:1-24. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Syed Kashif Rafi (email available below). General contact details of provider: https://edirc.repec.org/data/fmilmpk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.