Corporate Governance and Firm Value: An Empirical Study on Manufacturing Companies Listed On Pakistan Stock Exchange
Purpose: This study aimed to contribute to the existing literature in the field by determining influence of corporate governance measures on firm value in the context of Pakistan.
Methodology: The proxies used for corporate governance measures were as follows: presence of executive, non-executive and independent directors; board size; presence of audit committee and presence of human resource and remuneration committee. On the other hand, the proxies for firm value were as follows: MVA and EVA. A sample of 125 manufacturing firms listed on Pakistan Stock Exchange (PSX) was selected based on their market capitalization and availability of data. Data was obtained for the period 2011-2017 from audited financial reports of selected firms published on PSX and relevant companies’ websites. Multiple regression analysis was performed to obtain the results.
Findings: This study supports the fact that EVA can be a dependable measure in terms of value maximization goal. Firms can escalate this figure by employing the CCG mechanism. Moreover, this study also established a strong association among the CCG variables and MVA as per the findings.