Refine your search
Collections
Co-Authors
Year
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z All
Hassan, Asma
- Relationship between Code of Corporate Governance and Corporate Financial Performance (An Empirical Study of Food Companies Listed on KSE)
Abstract Views :226 |
PDF Views:1
Authors
Affiliations
1 Department of Management Sciences, Virtual University of Pakistan, Lahore, PK
1 Department of Management Sciences, Virtual University of Pakistan, Lahore, PK
Source
International Journal of Financial Management, Vol 7, No 1 (2017), Pagination: 1-9Abstract
The crucial role that implementation of Code of Corporate Governance plays on protecting the rights of minorities, shareholders, local as well as foreign investors cannot be denied. Companies all over the world are required to implement their respective Code of Corporate Governance for avoiding agency conflicts between companies' management and stakeholders and for assuring transparency in accountability. This paper aims at exploring the impact of implementation of corporate governance practices (designed by Securities and Exchange Commission of Pakistan) have on the financial position of companies. For explanatory variables of the study, composition of the board as per the Code of Corporate Governance that comprises of presence of independent, executive and non-executive directors has been taken into consideration. Return on equity has been taken as an indicator of firms' profitability i.e. the dependent variable. For this study, companies listed on food producing sector of Karachi Stock Exchange have been screened for excogitation of the relationship. It is an empirical research based on nine years data from 2007-2015. Using Hausman Test for selecting the data analysis technique between Fixed or Random, Fixed Cross Sectional Panel Analysis has been used for analysis of the data collected. Findings indicate that presence of independent, executive and non-executive directors as per the code requirements levies a significant impact on the profitability of companies indicated by return on equity. It is, thus concluded that companies should ensure compliance with code of governance practices to reduce not only the agency issues but also to increase their profitability.Keywords
Code of Corporate Governance, Fixed Cross Sectional Panel Analysis, Board Composition, Food Producers & Firms’ Profitability.
References
- (“King Report on Corporate Governance,”)
- Adewuyi, A. O., & Olowookere, A. E. (2013). New corporate code and immediate performance change of the Nigerian firms. Corporate Governance, 13(2), 169-183.
- Bachiller, P., Giorgino, M.-C., & Paternostro, S. The relationship between the board of directors and the performance. Analysis of Family and Non Family Firms in Italy.
- Bhagat, S., & Black, B. S. (2002). The non-correlation between board independence and long-term firm performance. As published in Journal of Corporation Law, 27, 231-273.
- Code of Corporate Governance. (2012). Retrieved from http://www.secp.gov.pk/CG/CodeOfCorporateGovernance_2012.pdf
- Ehikioya, B. I. (2009). Corporate governance structure and firm performance in developing economies: evidence from Nigeria. Corporate Governance, 9(3), 231–243.
- Heenetigala, K., & Armstrong, A. (2011). The Impact of Corporate Governance on firm performance in an unstable economic and political environment: Evidence from Sri Lanka. Paper presented at the 3rd Conference on Financial Markets and Corporate Governance.
- Hosseini, S. M., Ahmad, Z., & Lai, Y. W. (2011). The role of macroeconomic variables on stock market index in China and India. International Journal of Economics and Finance, 3(6), p.233.
- Hutchinson, M. (2009). Governance issues in accounting. Accounting Research Journal, 22(2), 89-92.
- Hutchinson, M. R., Percy, M., & Erkurtoglu, L. (2008). An investigation of the association between corporate governance, earnings management and the effect of governance reforms. Accounting Research Journal, 21(3), 239-262.
- Jensen, M. C., & Meckling, W. H. (1979). Theory of the firm: Managerial behavior, agency costs, and ownership structure: Springer.
- King Report on Corporate Governance.). Retrieved from http://en.wikipedia.org/wiki/King_Report_on_Corporate_Governance
- Maher, M., & Andersson, T. (2000). Corporate governance: Effects on firm performance and economic growth.
- Mohammad, S. D., Hussain, A., Jalil, M. A., & Ali, A. (2009). Impact of Macroeconomics Variables on Stock Prices: Emperical Evidance in Case of KSE (Karachi Stock Exchange). European Journal of Scientific Research, 38(1), 96-103.
- Olatunji, O. R., & Stephen, O. (2011). The role of nonexecutive directors in the profitability of Banks: A study of universal banks in Nigeria. International Journal of Business and Management, 6(2), p.248.
- Palliam, R., & Shalhoub, Z. (2003). The phenomenology of earnings management within the confines of agency theory. International Journal of Value-based management, 16(1), 75-88.
- Shank, T., Hill, R. P., & Stang, J. (2013). Do investors benefit from good corporate governance? Corporate Governance, 13(4), 384-396.
- Wu, M. C., Lin, H. C., Lin, I. C., & Lai, C. F. (2009). The effects of corporate governance on firm performance. Changua: National Changua University of Eductaion.