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Purpose This study aims to investigate the impact of corporate governance compliance, governance reforms and board attributes on operating liquidity of Pakistani listed non-financial firms. The study further tests how these relationships vary in the pre- and post-corporate governance reforms. Design/methodology/approach Fixed-effect regression model is used on 10 years panel data from 2007 to 2016 for a sample of 170 firms listed on the Pakistan Stock Exchange. Two-stage least squares model is used for addressing the endogeneity problem. Findings The findings reveal that governance compliance and governance reforms negatively affect operating liquidity. Among the board attributes, board meetings, directors’ remuneration, board foreign diversity and board gender diversity are significantly related to operating liquidity. Further exploration indicates that internal governance mechanisms are less effective to safeguard shareholders from expropriation during weak external governance. This suggests that strong external governance is inevitable to the effectiveness of internal governance mechanisms. Overall, the study findings support the agency theory. Practical implications The findings provide valid recommendations to policymakers interested in safeguarding the investors to focus on macro-level governance for making the micro-level governance effective. Further, the results provide the executives with an insight to improve the compliance level with the code of corporate governance. Originality/value Unlike prior studies, this study examines the impact of corporate governance compliance and novel board attributes – directors’ attendance at board meetings, number of board committees, directors’ remuneration and board foreign diversity on operating liquidity. Further, the study subdivides its sample period into pre- and post-corporate governance reforms to examine how external governance influences internal governance effectiveness.

PurposeThis study investigates the impact of board characteristics on the stock liquidity of Pakistani listed non-financial firms for the period 2007–2016.Design/methodology/approachThe study uses fixed-effects regression model on a sample of 170 non-financial firms listed on the Pakistan Stock Exchange for regressing the impact of board attributes on stock liquidity while for addressing the endogeneity two-stage least-square (2SLS) and lagged structure models are used.FindingsThe study finds that board meetings (BM), directors' attendance (DAT) at BM, board gender diversity, the number of board subcommittees (NBC) and board foreign diversity (BFD) positively affect stock liquidity. Checking the robustness through 2SLS and lagged structure models, it is suggested that the findings are robust to the problem of endogeneity.Practical implicationsOutcomes of the study signify the role of novel board attributes in improving the stock liquidity which has implications for investors, the board of directors and policymakers.Originality/valueThe authors are the first to investigate the impact of novel board attributes–BFD, directors' remuneration (DR), DAT and the number of board sub-committees on stock liquidity. Up to the best of researchers' knowledge, these board attributes have never been examined before in relation to stock liquidity.

This study examines the effects of lending constraints on the financial policies of UK publicly listed companies during the 2007-2009 financial crisis. Using a sample of 2039 publicly listed firms, the results of our analysis indicate that financial policies of firms are sensitive to variations in the supply of external finance and credit, suggesting that liquidity-constraint firms with low cash reserves suffered more at the time of the credit crunch. While managing through the potential negative effects of the financial crisis, majority of the sample companies increased the use of internal finance and deferred the payments of dividends which helped them apply effective financial policies during the crisis period. The findings of this study also document that during the crisis period, financial policies of firms were exposed to variations in the supply of finance and credit, which, by implication, posed a threat to their operations, sustainability and growth. Our findings produce awareness about the negative effects of the non-availability of external finance and credit supply to listed companies, and signify the role of different financing channels and credit system in the operations and growth of listed companies. These findings have implications for financial regulation and policy making in the UK.