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Moderating Role of Corporate Governance in the Relationship between Corporate Structure and Firm Performance: A Case Study of Pakistani Non-Financial Firms

Author

Listed:
  • Waseem Anwar

    (Department of Management Sciences, COMSATS University Islamabad, Lahore Campus, Pakistan)

  • Sidra Liaqat

    (Department of Management Sciences, Lahore Garrison University, Lahore, Pakistan)

  • Muhammad Waris

    (Department of Business Administration, Institute of Management Sciences (Pak-Aims), Lahore, Pakistan)

Abstract

The goal of this research is to investigate the moderating role of corporate governance in the relationship between corporate structure and firm performance. Secondary has been taken from company annual reports for this study. Panel data of 148 non-financial firms belonging to 16 different sectors companies listed on the PSX have been taken from 2004 to 2019. Firms were randomly selected and used panel data for analysis. A panel regression model is used to analyze the data. Analysis yield mix results of the impact of capital structure on firm performance. Short-term debt has a significant negative impact on ROA, whereas it has a positive relationship with ROE. Furthermore, Long-term debt has a significant positive impact on ROA and a negative relationship with ROE. Analyses reveals that total debt of the firm significantly and negatively affect the ROA, however it has a positive association with ROE. Moderating role Board size and female directors moderate the association among capital structure and firm performance. Female directors and board size can strengthen connection among capital structure of a company and its profitability.

Suggested Citation

  • Waseem Anwar & Sidra Liaqat & Muhammad Waris, 2022. "Moderating Role of Corporate Governance in the Relationship between Corporate Structure and Firm Performance: A Case Study of Pakistani Non-Financial Firms," iRASD Journal of Economics, International Research Alliance for Sustainable Development (iRASD), vol. 4(3), pages 400-418, September.
    • Handle: RePEc:ani:irdjoe:v:4:y:2022:i:3:p:400-418
    DOI: 10.52131/joe.2022.0403.0088
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    References listed on IDEAS

    as
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    2. Marzieh Khodavandloo & Zukarnain Zakaria & Annuar Md. Nassir, 2017. "Capital Structure and Firm Performance During Global Financial Crisis," International Journal of Economics and Financial Issues, Econjournals, vol. 7(4), pages 498-506.
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    6. ManYing Kang & Marcel Ausloos, 2017. "An Inverse Problem Study: Credit Risk Ratings as a Determinant of Corporate Governance and Capital Structure in Emerging Markets: Evidence from Chinese Listed Companies," Papers 1712.00602, arXiv.org.
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