2015

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Browsing 2015 by Author "Sabahat Riaz"

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    Impact of Internal Mechanism of Corporate Governance on Firm Performance
    (UMT, Lahore, 2015-11-15) Sabahat Riaz
    The present study investigates the impact of some of the variables of corporate governance on firm performance. Main purpose of the study is to investigate whether corporate governance vary from sector to sector because overall results seem to be misleading on the premise that industrial norms vary from sector to sector and even firm to firm within same sector. For this purpose, a sample of 50% firms has been chosen randomly from top non-financial seven sectors of Pakistan for the years from 2008 to 2014. These sectors have significant role in KSE-100 index fluctuation. Dependent variable is firm performance measured as ROA, ROE and Tobin Q whereas independent variables of corporate governance include Board Size, Board Composition, CEO Compensation and Ownership Concentration. Overall descriptive statistics show that highest board size is 16 with minimum of 7. Board size ranges from 8 to 16 in different sectors. There are certain firms in different sectors where leverage is zero and CEOs do not draw compensation. The empirical results of model summary reveal mixed results of the impact of corporate governance variables on different proxies of firm performance. For instance, board size does not impact firm performance in overall model whereas in engineering and chemicals sector it has positive impact and in Food sector board size has positive affect on Tobin Q & negative impact on ROE. In the same way empirical results show that Board Composition has no significant impact on firm performance in overall model whereas it has positive impact on firm performance in Chemical and Food sector and negative impact on firm performance in Engineering sector.