IDEAS home Printed from https://ideas.repec.org/a/rfh/bbejor/v11y2022i2p198-211.html
   My bibliography  Save this article

Impact Of Corporate Governance On Firm Performance In South Asian Countries

Author

Listed:
  • BARKAT ULLAH

    (Department of Business Administration, Ghazi University, Dera Ghazi Khan & University of Education, Dera Ghazi Khan Campus, Pakistan)

  • MUHAMMAD ZIAULLAH

    (Department of Business Administration, Ghazi University, Dera Ghazi Khan, Pakistan)

  • MUHAMMAD RAZZAQ ATHAR

    (University Institute of Management Scineces-PMAS-Arid Agriculture University Rawalpindi, Pakistan)

  • MALIK MUHAMMAD FAISAL

    (Department of Business Administration, Ghazi University, Dera Ghazi Khan, Pakistan)

  • BUSHRA ZULFIQAR

    (University Institute of Management Scineces-PMAS-Arid Agriculture University Rawalpindi, Pakistan)

Abstract

This paper investigates the impact of corporate governance on the financial performance of manufacturing firms in South Asian Countries. Financial performance is measured using both accounting and marketing based measures (ROA, ROE and Tobin's Q). However, corporate governance practices are captured through Board Size, CEO Duality, Audit Quality, Audit Committee Size and Audit Activity. The sample of the study comprised a total of 426 listed manufacturing firms of South Asian Countries for period spans 10 years from 2011 to 2020. Generalized Methods of Moments (GMM) was used for data analysis. We find significant impact of corporate governance on firm performance in the South Asian countries. According to the findings audit committee activity and size, as well as audit quality decisions, should be made efficiently as these factors have great implications for improving the performance of manufacturing firms in the South Asian Countries.

Suggested Citation

  • Barkat Ullah & Muhammad Ziaullah & Muhammad Razzaq Athar & Malik Muhammad Faisal & Bushra Zulfiqar, 2022. "Impact Of Corporate Governance On Firm Performance In South Asian Countries," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 11(2), pages 198-211, June.
    • Handle: RePEc:rfh:bbejor:v:11:y:2022:i:2:p:198-211
    as

    Download full text from publisher

    File URL: https://bbejournal.com/index.php/BBE/article/view/350/321
    Download Restriction: no
    File URL: https://bbejournal.com/index.php/BBE/article/view/350
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Geoffrey C. Kiel & Gavin J. Nicholson, 2003. "Board Composition and Corporate Performance: how the Australian experience informs contrasting theories of corporate governance," Corporate Governance: An International Review, Wiley Blackwell, vol. 11(3), pages 189-205, July.
    2. Michael C. Jensen, 2010. "The Modern Industrial Revolution, Exit, and the Failure of Internal Control Systems," Journal of Applied Corporate Finance, Morgan Stanley, vol. 22(1), pages 43-58, January.
    3. Audi, Marc & Ali, Amjad, 2019. "The Advancement in Information and Communication Technologies (ICT) and Economic Development: A Panel Analysis," MPRA Paper 93476, University Library of Munich, Germany.
    4. Audi, Marc & Ali, Amjad, 2016. "Environmental Degradation, Energy consumption, Population Density and Economic Development in Lebanon: A time series Analysis (1971-2014)," MPRA Paper 82494, University Library of Munich, Germany, revised 2017.
    5. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    6. Audi, Marc & Sadiq, Azhar & Ali, Amjad, 2021. "Performance Evaluation of Islamic and Non-Islamic Equity and Bonds Indices: Evidence from selected Emerging and Developed Countries," MPRA Paper 109866, University Library of Munich, Germany.
    7. ŞENTÜRK, İsmail & Ali, Amjad, 2019. "Socioeconomic Determinants of Gender Specific Life Expectancy in Turkey: A Time Series Analysis," MPRA Paper 97815, University Library of Munich, Germany.
    8. Marc Audi & Amjad Ali & Yannick Roussel, 2021. "Aggregate and Disaggregate Natural Resources Agglomeration and Foreign Direct Investment in France," International Journal of Economics and Financial Issues, Econjournals, vol. 11(1), pages 147-156.
    9. Akbar, Saeed & Poletti-Hughes, Jannine & El-Faitouri, Ramadan & Shah, Syed Zulfiqar Ali, 2016. "More on the relationship between corporate governance and firm performance in the UK: Evidence from the application of generalized method of moments estimation," Research in International Business and Finance, Elsevier, vol. 38(C), pages 417-429.
    10. Kenneth M. Lehn & Sukesh Patro & Mengxin Zhao, 2009. "Determinants of the Size and Composition of US Corporate Boards: 1935‐2000," Financial Management, Financial Management Association International, vol. 38(4), pages 747-780, December.
    11. Asif Sajid & Amjad Ali, 2018. "Inclusive Growth and Macroeconomic Situations in South Asia: An Empirical Analysis," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 7(3), pages 97-109, September.
    12. Renée B. Adams & Heitor Almeida & Daniel Ferreira, 2005. "Powerful CEOs and Their Impact on Corporate Performance," Review of Financial Studies, Society for Financial Studies, vol. 18(4), pages 1403-1432.
    13. Marc Audi & Amjad Ali, 2016. "A Causality and Co-integration Analysis of Some Selected Socio-Economic Determinants of Fertility: Empirics from Tunisia," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 5(1), pages 20-36, March.
    14. Iram Ashraf & Amjad Ali, 2018. "Socio-Economic Well-Being and Women Status in Pakistan: An Empirical Analysis," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 7(2), pages 46-58, June.
    15. William C. Brainard & James Tobin, 1968. "Pitfalls in Financial Model-Building," Cowles Foundation Discussion Papers 244, Cowles Foundation for Research in Economics, Yale University.
    16. Robert E. Hall, 1977. "Investment, Interest Rates, and the Effects of Stabilization Policies," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 8(1), pages 61-122.
    17. Sanvicente, Antonio Zoratto, 2011. "Capital Structure Decisions and the Interaction with Payout and Ownership Decisions: Evidence from Brazil," Insper Working Papers wpe_264, Insper Working Paper, Insper Instituto de Ensino e Pesquisa.
    18. Audi, Marc & Ali, Amjad & Roussel, Yannick, 2021. "Measuring the Tax Buoyancy: Empirics from South Asian Association for Regional Cooperation (SAARC)," MPRA Paper 109567, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fiaz Ahmad Sulehri & Saba Sharif, 2022. "The Impact of Firm Sustainability on Firm Growth: Evidence from USA," Journal of Policy Research (JPR), Research Foundation for Humanity (RFH), vol. 8(2), pages 1-15, August.
    2. Muhammad Ashraf & Arslan Ali Raza & Muhammad Ishaq, 2022. "A Novel Approach Of Social Media Analytics For Predicting National Consumer Confidence Index," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 11(2), pages 220-234, June.
    3. Muhammad Hatim & Zerish Tasleem & Muhammad Nadeem, 2022. "The Influence Of Education And Health On Rural Household Poverty: A Moderating Role Of Culture In Punjab, Pakistan," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 11(2), pages 120-133, June.
    4. Abdul Hai Rathore & Abdullah Sahi, 2022. "The impact of Corporate Governance on voluntary disclosure of R&D expenditure of USA Pharmaceutical firms," Journal of Policy Research (JPR), Research Foundation for Humanity (RFH), vol. 8(2), pages 34-53, August.
    5. Chan Bibi & Muhammad Zahid Naeem, 2021. "Climate Change and Its Impact on Cash and Food Crop Production in Pakistan: A Time Series Analysis," Journal of Policy Research (JPR), Research Foundation for Humanity (RFH), vol. 7(4), pages 31-40, December.
    6. Qasim Abbasi & Bilal Khokar, 2021. "Nexus between Gender Inequality and Income Inequality," Journal of Policy Research (JPR), Research Foundation for Humanity (RFH), vol. 7(4), pages 41-49, December.
    7. Abdul Rauf & Arif Khan & Muhammad Faiz Mehdi, 2021. "Health Expenditure, Family Planning, and Infant Mortality in Punjab," Journal of Policy Research (JPR), Research Foundation for Humanity (RFH), vol. 7(4), pages 1-10, December.
    8. Shahzad Hassan & Norazah Mohd Suki & Maria Akhtar & Khan Zaman Khan & Naveed Hassan, 2022. "What Is The Role Of Humble Leadership In Shaping Customer Citizenship Behavior And Employee Innovative Work Behavior? Evidence From Service Sector," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 11(2), pages 235-243, June.
    9. Alim, Wajid & Ali, Amjad & Minhas, Amna Shafiq, 2022. "The Impact of Leverage on the Firm Performance: A Case of Fertilizers Sector of Pakistan," MPRA Paper 114200, University Library of Munich, Germany.
    10. Marc Audi & Razan Al-Masri & Chan Bibi, 2022. "Challenging Assumptions about Women’s Empowerment and Economic Resources and Domestic Violence among Young Married Women in India," Journal of Policy Research (JPR), Research Foundation for Humanity (RFH), vol. 8(2), pages 23-33, August.
    11. Aqsa Mehmood & Hafiz Muhammad Abubakar Siddique & Amjad Ali, 2022. "Impact Of Health On Worker Productivity: Evidence From South Asia," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 11(2), pages 1-8, June.
    12. Ghulam Qambar & Shahid Mehmood & Nosheen Kanwal, 2021. "Promotion Oriented Research Culture: Understanding Scholars’ Deficiencies In Research Proficiency," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 10(3), pages 135-143, September.
    13. Zia-Ur-Rehman & Muhammad Razzaq Athar & M. Mohsin Shahid & Malik Muhammad Faisal & Mareum Shehzadi, 2022. "Exploring The Serial Mediation Of Mobile App Engagement And Self Brand Connection In The Relationship Between Brand Experience And Loyalty Towards Brand," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 11(2), pages 20-30, June.
    14. Saba Nasir & Saima Sharif, 2022. "Islamic Banking and Finance: Current Developments and its Future Prospects," Journal of Policy Research (JPR), Research Foundation for Humanity (RFH), vol. 8(1), pages 31-44, March.
    15. Zerish Tasleem & Muhammad Hatim & Mahnoor Malik & Muhammad Nadeem & Muhammad Tariq Ramzan, 2022. "The Impact Of Health Facilities On Rural Poverty In Southern Punjab, Pakistan," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 11(2), pages 104-109, June.
    16. Arzoo Mushtaq & Shahnawaz Malik & Muhammad Hanif Akhtar, 2022. "Nonlinear Taylor Rule And Inflation-Targeting In Pakistan: A Time Series Analysis," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 11(2), pages 185-197, June.
    17. Shahzad Hassan & Norazah Mohd Suki, 2022. "Plea For Customer Citizenship Behaviour: Mediating Role Of Customer Engagement And Customer Perceived Stress," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 11(2), pages 9-19, June.
    18. Tariq Hussain & Ahmad Raza Ul Mustafa & Makhdum M.I. & Kaleem Ullah, 2022. "Defense Expenditures, Fiscal Deficit And Debt Servicing Nexus: A Case Study Of Pakistan," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 11(2), pages 74-83, June.
    19. Anam Sidra, 2021. "Role Of Supply Chain Practices In Reducing Trust Deficit On E- Business In Pakistan," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 10(3), pages 247-252, September.
    20. Marc Audi & Fiaz Ahmad Sulehri & Amjad Ali & Razan Al-Masri, 2022. "An Event Based Analysis of Stock Return and Political Uncertainty in Pakistan: Revisited," International Journal of Economics and Financial Issues, Econjournals, vol. 12(5), pages 39-56, September.

    More about this item

    Keywords

    Corporate Governance; Firm Performance; South Asian Countries;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rfh:bbejor:v:11:y:2022:i:2:p:198-211. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dr. Muhammad Irfan Chani (email available below). General contact details of provider: https://edirc.repec.org/data/rffhlpk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.