Effect Of Corporate Governance On The Capital Structure Of Listed Nonfinancial Firm Of Pakistan
Author: Muhammad Hassan Shehzad

The aim of this empirical study is to investigate whether corporate governance attributes such as board size, board independence, audit quality, shareholder rights, transparency, corporate governance index and CEO duality affect capital structure choices of listed non-financial Pakistani firms. Regression analysis is used to estimate the relationship between corporate governance measures and capital structure of nonfinancial listed firms, during 2003-2015. The results suggest that board independence, audit quality, shareholder rights, transparency are positively related to the debt to equity ratio whereas board size and CEO duality is negatively relation with debt to equity ratio. Firm specific variables such as profitability and liquidity are positive related to the total debt ratio and the long-term debt ratio, whereas firm size is positively related. Asset tangibility is positively related to the long-term debt ratio and negatively related to the total debt ratio. Although Pakistani firms have weak internal and external corporate governance mechanisms compared to firms in developed countries, the empirical findings suggest that corporate governance attributes in part explicate the financing behaviour of Pakistani firms. The empirical results of this study provide support to corporate managers in establishing an optimal capital structure, and to regulatory authorities for enacting laws and developing institutional support to make corporate governance mechanisms work more effectively in the country. This research contributes to the literature by illuminating the significant links between some corporate governance measures and capital structure choices of firms in Pakistan. Supervisor:- Dr. Attiya Yasmin Javid

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Keywords : Capital Structure, Corporate finances, Corporate Governance, Financing, Non Financial Firms
Supervisor: Attiya Yasmin Javid

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