Impact of Ownership Structure and Corporate Governance on Capital Structure of Pakistani Listed Companies
By S. A. Butt, Arshad Hasan. 2009
245 citations recorded by the source corpus.
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.
Subfields: Accounting
View Paper: https://www.semanticscholar.org/paper/975be4612dc32b8ad18b01772d6842ae07304edd
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Citations in the corpus
- The Examination of the Effect of Ownership Structure on Firm Performance in Listed Firms of Tehran Stock Exchange Based on the Type of the Industry (2011, background): “According to Hasan and Butt (2009), corporate governance is a philosophy and mechanism that entails processes and structure which facilitate the creation of shareholder value through management of the corporate affairs in such a way that ensures the protection of individual and collective interest o”
- Moderating effects of corporate governance mechanism on the relation between capital structure and firm performance (2021, background): “On the contrary, Hassan and Butt (2009) found a negative relationship between indicators of CG, namely the size of the board of commissioners and managerial share ownership and capital structure.”