This paper explores the relationship between corporate governance and capital structure of listed companies in an emerging equity market, Pakistan. The study covers the period 2002 to 2005 for which firm level data for 58 randomly selected non-financial listed companies from Karachi Stock Exchange has been examined by using multivariate regression analysis under fixed effect model approach. Measures of corporate governance employed are board size, board composition, and CEO/Chair duality. Impact of shareholding on financing decisions has also been examined by using managerial shareholding and institutional shareholding. Similarly influence of controlled variables like firm size and profitability on firms' financing mechanism is also investigated. Results reveal that board size and managerial shareholding is significantly negatively correlated with debt to equity ratio. However corporate's financing behavior is not found significantly influenced by CEO/Chair duality and the presence of non-executive directors on the board. However, control variables firm size and return on assets are found to have a significant effect on capital structure. No temporal effects are observed. Therefore results suggest that corporate governance variables like size and ownership structure and managerial shareholding play important role in determination of financial mix of the firms.
Purpose The purpose of this research study is to lower the knowledge gap by exploring the degree of corporate social responsibility disclosures (CSRD) made by top Pakistani (Karachi Stock Exchange [KSE] 100 listed non-financial) companies and investigating the financial and non-financial CSRD determinants which aid to the policy development in implementing required regulatory reforms. Design/methodology/approach KSE 100 index listed companies are covered in this study that published their annual reports consistently during the time period of five years from 2009 to 2013. Financial and non-financial data will be collected from the sample of KSE-listed company’s annual reports. Information related to corporate social responsibility (CSR) will be collected by hand from reports of disclosure of CSR, disclosures of corporate governance, report of the directors, a statement of Chairman’s and notes to the financial statement enclosed in companies’ annual reports. Content analysis technique to measure corporate environmental and social disclosures for items scoring the approach is, in essence, dichotomous, one score assigned to the item in the scores of instrument of research if it disclosed, otherwise assigned zero, and no penalty or negative score is imposed to the item which is reflected irrelevant. Findings Family ownership, industry type and firm size have positive significant relationship with CSR disclosure, and the authors found negative significant relationship between risk and CSRD. Results of this study propose that, in developing countries like Pakistan, the extent of determinant of CSRD is based on the number of important firm and industry characteristics and are aligned with empirical evidence. Research limitations/implications This research uses only annual reports of the companies for the data of CSRD but companies also use other sources for disclosure of their CSR information such as mass media, etc. Content analysis is performed by one author and the second author cross-checked the companies, so biasness may remain a limitation due to the fact that errors attach in rating scale due to judgments of human. Practical implications The finding of this study helps policymakers to quantify and know the degree of CSRD and its determinants which enables them to boost the organizational legitimacy and CSR practices by adopting the needed regulatory reform. Social implications The results of this study provide warning signals to the management of the companies in some cases where disclosure level of CSR is lower in the period before issuance of SECP CSR guidelines of 2013. Originality/value This research study offers valuable inputs in the development and betterment of CSR rules for the reason that the findings of the research provide information to the future CSR rules and guidelines. The results of this study also help the regulator (SECP) in Pakistan to revise the CSRD to align with the need of changing industrial characteristics and economic environment.
This study examines the impact of the quality of corporate governance, as measured by a specially constructed corporate governance index, on the expected cost of equity calculated using the capital asset pricing model (CAPM) approach. A total of 114 listed companies were investigated to analyze the relationship between the two variables for the period 2003 to 2007. The quality of corporate governance was measured by assigning weights to a set of related variables, although these variables were also considered individually. We used descriptive statistics, a correlation matrix, a simple ordinary least squares (OLS) approach, and fixed effect model to test the panel data collected. We found a negative relationship between managerial ownership and board size with the cost of equity, and a positive relationship between board independence, audit committee independence, and corporate governance with the cost of equity. These results could be due to the transition phase through which Pakistani companies are passing after the promulgation of the Code of Corporate Governance in 2002.
ABSTRACT. The current study aims to investigate the relationship of overconfidence bias, loss aversion bias, self-serving bias and anchoring bias with working capital management. The study used questionnaire and acquired primary data from the companies of manufacturing sector of Pakistan, are selected as sample of the study. The study used connivance sampling technique for data acquisition. Moreover, descriptive statistics are applied by using item wise technique and nonparametric techniques are also applied that supported results with historic investigations and have found significant relationship of biases with working capital management.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.
hi@scite.ai
10624 S. Eastern Ave., Ste. A-614
Henderson, NV 89052, USA
Copyright © 2024 scite LLC. All rights reserved.
Made with 💙 for researchers
Part of the Research Solutions Family.