Determinants of the firm value of listed banks in Pakistan: A panel data approach

Jagirani, Tahir Saeed; Chee, Lim Chee; Kosim, Zunarni

doi:10.55493/5002.v13i4.4764

Cited by 1 publication

(2 citation statements)

References 19 publications

(24 reference statements)

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“…Independent directors on the board might have an impact and prevent senior management from misusing their authority. Independent directors are crucial in ensuring accurate and trustworthy financial reporting, which helps the executives stay focused on increasing corporate value (Ramly et al, 2017;Jagirani, Chee & Kosim, 2023).…”

Section: Introductionmentioning

confidence: 99%

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Board characteristics and firm value: The moderating role of capital adequacy

Jagirani

Chee

Kosim

2023

Investment Management and Financial Innovations

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The global financial crisis increased corporate world uncertainties. Therefore, to meet these challenges, firms take a more proactive approach to tackling various corporate governance and firm value initiatives and policies. This study aims to explore the moderating effect of capital adequacy on the relationship between board characteristics and the firm value of listed banks in Pakistan. To obtain a more robust empirical model and results, this study incorporates moderator and control variables. This study is based on half-yearly secondary data of 560 sample observations from 2009 to 2021. Multiple regression and panel data estimation techniques were employed for the analysis. The study used firm value as a dependent variable, proxied by Tobin’s Q, along with five independent variables, one moderating variable, and two control variables. The results of this study indicate that a higher capital adequacy ratio (CAR) increases firm value and has a moderating effect on board characteristics and firm value. Low proportions of women and independent directors on board affect firm value. The presence of risk management and audit committees in listed Pakistani banks, on the other hand, increases firm value. The banks in Pakistan have no problem with CEO duality. The study also found that bank size has a positive relationship with firm value, while bank age has a negative relationship with firm value.

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Section: Introductionmentioning

confidence: 99%

“…The minimum capital requirement is intended to safeguard banks from any financial risk. By preserving a capital reserve against anticipated losses, CAR has the benefit of reducing the risk of future losses (Rafique et al, 2020;Jagirani, Chee & Kosim, 2023).…”

Section: Introductionmentioning

confidence: 99%