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The Relationship between Corporate Governance Indicators and Firm Value : A Case Study of Karachi Stock Exchange

  • Attiya Y. Javed

    (PIDE)

  • Robina Iqbal
Registered author(s):

    We investigated whether differences in quality of firm-level corporate governance can explain the firm-level performance in a cross-section of companies listed at Karachi Stock Exchange. Therefore, we analysed the relationship between firm-level value as measured by Tobins Q and total Corporate Governance Index (CGI) and three sub-indices : Board, Shareholdings and Ownership, and Disclosures and Transparency for a sample of 50 firms. The results indicate that corporate governance does matter in Pakistan. However, not all elements of governance are important. The board composition and ownership and shareholdings enhance firm performance, whereas disclosure and transparency has no significant effect on firm performance. We point out that those adequate firm-level governance standards can not replace the solidity of the firm. The low production and bad management practices can not be covered with transparent disclosures and transparency standards.

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    File URL: http://www.eaber.org/node/22198
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    Paper provided by East Asian Bureau of Economic Research in its series Governance Working Papers with number 22198.

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    Date of creation: Jan 2007
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    Handle: RePEc:eab:govern:22198
    Contact details of provider: Postal: JG Crawford Building #13, Asia Pacific School of Economics and Government, Australian National University, ACT 0200
    Web page: http://www.eaber.org

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