Purpose The purpose of this paper is to empirically capture the impact of a chief executive officer’s (CEO) personal and organizational characteristics on firm performance in the context of a developing country and to explore whether capital structure mediates the relationship between CEO characteristics and firm performance. Design/methodology/approach In order to test the hypothesized model, CEO duality, tenure and personal characteristics (age, gender and education) were taken as explanatory variables to study their impact on firm performance. Data were collected from 179 Pakistani companies from 2009–2015. The collected data were processed via panel data regression analysis under fixed effect assumptions. Findings Results show that CEO duality has a negative impact on firm performance and that a CEO with a dual role is more inclined toward debt financing. Moreover, a CEO with a longer tenure tends to be opportunistic and prioritize his/her personal interest while making strategic financial decisions, thus creating agency costs for the firm. Furthermore, CEO characteristics like age, gender and education have significant effects on firm financial decisions and firm performance. Finally, the debt and equity ratio partially mediates the link between CEO characteristics and firm performance. Research limitations/implications The findings of this study have limited generalizability due to the specific nature of the sample characteristics. Originality/value To the best of the authors knowledge, this study is the first to explore the impact of CEO characteristics on capital structure and firm performance. This work is also the first to explore the mediating role of capital structure in the relationship between CEO characteristics and firm performance by using Pakistani data.
The purpose is to explore whether the CEO’s personal and professional attributes affect corporate social responsibility (CSR) disclosure or not in particular context of Pakistan. This article attempts to bridge this gap using the data set of 1,790 firm-year observations comprising of firms listed at the Pakistan Stock Exchange. For this purpose, the logistic regression technique is employed while taking CEO personal and professional attributes as explanatory variables and CSR disclosure as the dependent variable. Results indicate that firm size and CSR disclosure has a positive relationship. The outcomes based on binary logistic regression demonstrate that CEO ownership has a negative impact, whereas CEO tenure, CEO education, CEO age, and CEO compensation are the variables that have a positive impact on CSR disclosure. In addition, duality, ownership, and gender of the CEO are found to be insignificant. Evidence on CEO demographics and their impact on disclosure choice might be helpful for policymakers and regulators. This study lacks generalization due to the unique setting of Pakistan. Our research contributes to the body of knowledge containing upper echelons theory in several ways. First, it answers the call for an extension of research toward social responsibility disclosures and individual’s traits impact on it. Second, our study adds to the scarce literature available on CSR research and practices in developing countries. Third, it is one of the first quantitative studies in the specific context of Pakistan as data for these variables is not available in organized form publicly.
This article examines the risk and return profiles of stock indices composed of companies meeting environmental, social and governance (ESG) screening criteria [such as the Dow Jones Sustainability Indices (DJSI)] and conventional composite indices of eight Asian countries from 2002 to 2014. The results indicate that there are no significant differences in the returns or risk-adjusted returns between the ESG indices and the composite indices within countries. The results do reveal that the market volatility of the ESG indices is higher than the market volatility of the conventional indices. Market betas of DJSI and ESG equity indices are significantly lower than betas of the composite equity indices. The overall results indicate that the performance of ESG equity indices of many Asian countries is similar to the performance of conventional indices, suggesting that investors can pursue socially responsible investing objectives without a material difference in portfolio performance from conventional investing.
The purpose of this study is to explore the link between corporate governance characteristics and corporate social responsibility disclosure of listed companies in the Pakistan stock Exchange (PSX), Pakistan. A sample of 179 companies from financial and non-financial sectors are studied from 2009 to 2015. The data is collected from their annual reports and websites. Binary logistic regression analysis is employed to test the models. The results reveal that board size, number of meetings and board independence are significant corporate governance characteristics to establish the link with corporate social responsibility disclosure. This study also explore that the trend of CSR disclosure is increasing in financial as well as non-financial sector. Additionally, the companies disclose their CSR activities lead in financial performance as compare to their counterpart. This study adds in the literature to explore the influence of board characteristics on corporate social responsibility disclosure from a developing country’s perspective.
Assessing the role of diversity in corporate governance has attracted growing interest. In addition, significant relationships are expected between diversity dimensions and firm performance. This research aims to analyze the relationships between female presence in corporate board-firm financial performance and the extent to which such influence is moderated by family ownership. The study's sample, based on the listed firms on the Pakistan Stock Exchange (PSX), represents the nonfinancial sector from 2008 to 2019 with 2087 firm-year observations. Fixed-effect regression analysis was applied to examine the proposed hypothesis. The study's findings indicate that the presence of women in corporate governance is positively associated with firm financial performance. Simultaneously, the mentioned relationship is less pronounced when family ownership is a moderator. The empirical findings of the study support the argument that the presence of women in corporate boards is positively associated with financial performance and supports the reforms made by codes of corporate governance (CCG) that make the presence of female directors' mandatory on the corporate boards. Additionally, the study findings partially confirm that a higher proportion of women on the board increases firm performance. This study offers insights for policymakers to implement legislation for a diverse gender placement in the board of directors and exploit the potential benefits of the gender-balanced board, which generally improves firm performance.
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