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Corporate Governance as a Determinant of Stock Price Synchronicity: Empirical Evidence from Pakistan


  • Adnan Ahmad

    (Assistant Professor, IBL,Abdul Wali Khan University Mardan, KP, Pakistan.)

  • Humera Manzoor

    (Assistant Professor,IMS,Kohat University of Science and Technology, Kohat, KP, Pakistan.)

  • Muhammad Ibrahim Khan

    (Assistant Professor, IBL,Abdul Wali Khan University Mardan, Mardan, KP, Pakistan.)


The objective of this study is to investigate the association of investor protection (IP) and stock price synchronicity (SPS). Based on the theory that a strong IP reduces information asymmetry (IA) and enhances the quality of firm fundamental information through disclosures of annual reports. Such information is then considered for investment decisions. SPS is measured by Co-movement of majority of share prices in either direction in a stock market, while IP is proxied by Size of the Board of Directors, ratio of the independent directors to total size, and audit committee. Data has been downloaded from State Bank of Pakistan, Companies web sites, and Pakistan Stock Exchange for the period 2010-17. Using panel data analysis techniques, results show that IP and SPS are negatively related. These findings suggest that companies with strong IP help in reducing IA and thus increase the use of FFIs for investment purposes.

Suggested Citation

  • Adnan Ahmad & Humera Manzoor & Muhammad Ibrahim Khan, 2017. "Corporate Governance as a Determinant of Stock Price Synchronicity: Empirical Evidence from Pakistan," Global Regional Review, Humanity Only, vol. 2(1), pages 289-304, June.
  • Handle: RePEc:aaw:grrjrn:v:2:y:2017:i:1:p:289-304
    DOI: 10.31703/grr.2017(II-I).20

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    References listed on IDEAS

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    More about this item


    Stock Price Synchronicity; Corporate Governance; Investor Protection; Board Size; Independent Directors; Audit Committee; Disclosure;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General


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