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Impact of Corporate Governance on Performance: A Study of Listed Firms in Pakistan

Author

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  • Ali, Amjad
  • Alim, Wajid
  • Ahmed, Jawad
  • Nisar, Sabahat

Abstract

The objective of this exploration is to show the relationships among corporate governance tools (Board size, board independence, CEO status, Board Education, and Established Years of the firm) and firm performance which is determined by Return on Asset (ROA). Quantitative data is used to discover the association between the variables. The top seventy-five companies registered on the Pakistan Stock Exchange involving the period from 2010 to 2019 are taken as a sample. The research found that there is a connection between the performance of the firm with the overall extent of directors, board independence, and average education of board representatives. Insignificant results came for CEO duality and established years of the firm. The result predicted that an increase in total board members and average education of board members will increase firm performance (ROA) whereas a reduction in board independence will reduce firm performance (ROA) which explains the importance of corporate governance for the success of firm performance. Unlike previous studies, this study tried to find a long-term influence of corporate governance on firm performance by analyzing five different variables for the listed firms of Pakistan. The study provides the importance of corporate governance tools and their effectiveness for the success of organizations, especially in Pakistan.

Suggested Citation

  • Ali, Amjad & Alim, Wajid & Ahmed, Jawad & Nisar, Sabahat, 2021. "Impact of Corporate Governance on Performance: A Study of Listed Firms in Pakistan," MPRA Paper 111299, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:111299
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    More about this item

    Keywords

    Corporate Governance; Firm Performance; Pakistan; ROA; CEO Duality; Board Size; Board Independence; Board Education;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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