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The Interaction Effect of Financial Leverage on the Relationship Between Board Attributes and Firm Performance; Evidence of Non-financial Listed Companies of Pakistan

Author

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  • Khan, Sajjad Nawaz
  • Yaseen, Muhammad Noman
  • Fakhra Mustafa
  • Sidra Abbasi

Abstract

The eminence of corporate governance (CG) was grasped after the major blunders incorporate strategies and distinct corporate scandals around the world during the global financial crises. Advanced countries have passed numerous laws such as “Say on Pay” or the Sarbanes-Oxley Act to shield the shareholder’s wealth. However, evolving countries are still flourishing to gain recognition in corporate governance (CG) effectiveness. The intention of the study is to probe the link between the CG (board size, outside directors) and firm performance (Tobin’s Q). Leverage has been used as an interaction term in the current study. The data had been collected from 130 non-financial firms from the year 2012 to 2015 and Multiple Regression Techniques will be used as the instruments for data analysis. The results indicate that the board size and Tobin’s Q have a significant association and outside directors’ insignificant association with Tobin’s Q. The interaction effect of leverage found a significant connotation between board size, outside directors, and Tobin’s Q.

Suggested Citation

  • Khan, Sajjad Nawaz & Yaseen, Muhammad Noman & Fakhra Mustafa & Sidra Abbasi, 2019. "The Interaction Effect of Financial Leverage on the Relationship Between Board Attributes and Firm Performance; Evidence of Non-financial Listed Companies of Pakistan," Journal of Accounting and Finance in Emerging Economies, CSRC Publishing, Center for Sustainability Research and Consultancy Pakistan, vol. 5(1), pages 115-122, June.
    • Handle: RePEc:src:jafeec:v:5:y:2019:i:1:p:115-122
    DOI: http://doi.org/10.26710/jafee.v5i1.681
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    Citations

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    Cited by:

    1. Ploypailin Kijkasiwat & Anwar Hussain & Amna Mumtaz, 2022. "Corporate Governance, Firm Performance and Financial Leverage across Developed and Emerging Economies," Risks, MDPI, vol. 10(10), pages 1-20, September.
    2. Zahid Bashir & Ghulam Ali Bhatti & Asad Javed, 2020. "Corporate governance and capital structure as driving force for financial performance: Evidence from non-financial listed companies in Pakistan," Business Review, School of Economics and Social Sciences, IBA Karachi, vol. 15(1), pages 108-133, January-J.
    3. Waseem Subhani & Ali Amin & Muhammad Azeem Naz & Nasir Sultan & Sumaira Aslam, 2024. "Board Gender Diversity and Firm Value: A Case of PSX," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 13(1), pages 237-245.
    4. Shafiq Ur Rehman & Sajjad Nawaz Khan & Waseem Subhani & Iftikhar Mehboob & Muhammad Noman Yaseen & Asad Qayoom, 2023. "Impact of Distributed Ledger Technology (DLT) and Fintech Investment on Central Bank Policy and Monetary Policy Effectiveness," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 12(3), pages 202-210.
    5. Umer Gulzar & Sajjad Nawaz Khan & Fahad Javed Baig & M. Akbar Ali Ansari & Rabia Akram & Muhammad Kamran, 2021. "The Impact Of Corporate Governance On Risk Management: Evidence From The Banking Sector Of Pakistan," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 10(3), pages 196-207.

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