Does Corporate Governance Play Role in Firms’ Performance? A Comparative Study of Pakistan, India and Bangladesh

International Journal of Economics and Empirical Research. 2016, 4(9), 450-464.

15 Pages Posted: 23 Aug 2018

See all articles by Ahmed Imran Hunjra

Ahmed Imran Hunjra

University of Waikato; Pir Mehr Ali Shah Arid Agriculture University Rawalpindi (PMAS)

Hadia Naeem

Pir Mehr Ali Shah Arid Agriculture University Rawalpindi (PMAS)

Ayesha Noor

Pir Mehr Ali Shah Arid Agriculture University Rawalpindi (PMAS)

Amna Saleem

Pir Mehr Ali Shah Arid Agriculture University Rawalpindi (PMAS)

Date Written: 2016

Abstract

Purpose: To answer the question regarding impact of corporate governance on firms’ performance in Pakistan, India and Bangladesh, current study is conducted which is unique in the sense that it consists of integrative approach using ownership structure and board structure as two main corporate governance mechanisms.

Methodology: Panel data of thirty listed firms from nonfinancial sector of Pakistan and India and of twenty seven listed firms from the Bangladesh is taken from Pakistan Stock Exchange, Bombay Stock Exchange and Dhaka Stock Exchange respectively. Data ranges from year 2010 to 2015. Panel regression has been applied for data analysis.

Findings: Findings of the study revealed that some of variables have significant impact on firms’ performance in one country while remaining variables impact significantly in other countries. Managerial ownership is significantly and negatively associated with firm performance when measured through ROA. On the other hand institutional ownership, foreign ownership and board structure variables show insignificant relationship with firm performance in Pakistan. All of the variables of ownership and board structure show insignificant association with firms’ performance measured through ROA and ROE in India and Pakistan respectively. CEO/chairman duality is positive and significantly associated with ROE in India. Foreign ownership is significantly and positively associated with ROA and board independence has a significant and positive association with ROE in Bangladesh.

Recommendations: Policy recommendations have been provided.

Keywords: Corporate governance, Firms’ performance, Ownership structure, Board structure

JEL Classification: D23

Suggested Citation

Hunjra, Ahmed Imran and Naeem, Hadia and Noor, Ayesha and Saleem, Amna, Does Corporate Governance Play Role in Firms’ Performance? A Comparative Study of Pakistan, India and Bangladesh (2016). International Journal of Economics and Empirical Research. 2016, 4(9), 450-464.. Available at SSRN: https://ssrn.com/abstract=3229746

Ahmed Imran Hunjra (Contact Author)

University of Waikato ( email )

Te Raupapa
Private Bag 3105
Hamilton, 3240
New Zealand

Pir Mehr Ali Shah Arid Agriculture University Rawalpindi (PMAS) ( email )

Muree Road Rawalpindi
Shamsabad, Punjab 44000
Pakistan
00923457162527 (Phone)

Hadia Naeem

Pir Mehr Ali Shah Arid Agriculture University Rawalpindi (PMAS)

Muree Road Rawalpindi
Rawalpindi, Punjab 44000
Pakistan

Ayesha Noor

Pir Mehr Ali Shah Arid Agriculture University Rawalpindi (PMAS)

Muree Road Rawalpindi
Rawalpindi, Punjab 44000
Pakistan

Amna Saleem

Pir Mehr Ali Shah Arid Agriculture University Rawalpindi (PMAS)

Muree Road Rawalpindi
Rawalpindi, Punjab 44000
Pakistan

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