The Role of Corporate Governance and Working Capital Management on a Sustainable Returns: An evidence from the Non-Financial Sector of Pakistan.

Abstract

As this study was conducted to investigate the impact of some corporate Governance variables and working capital management on financial performance of Non-financial KSE 100 Index firms listed at Pakistan Stock Exchange (PSX). The independent variables used for this study were Board size, Board composition, Board meetings, CEO duality, working capital, operating cycle, inventory turnover ratio and dependent variable firm performance was gauged by ROA.

The two control variables Firm size, and firm age were also used for this study. The major objectives for this study were to analyze the impact of Board size, Board composition, Board meetings, Board composition, CEO duality, operating cycle, current ratio and inventory turnover ratio on firm performance of Non-Financial KSE 100 Index firms listed at Pakistan Stock Exchange (PSX). This study was quantitative and descriptive in nature.

The Population of interest for this study was firms from different sectors of KSE 100 index listed at Pakistan Stock Exchange and had operated during the period of 2011 to 2019. Initially 50 Non-Financial KSE 100 Index firms listed at (PSX) were taken as sample for this study and then due to non-availability of data for some companies, a sample of 36 firms taken as final sample

To analyze the collected data Descriptive statistics, Correlation matrix, Multiple-linear regression analysis, F statistics and fixed and random effect test, Hausman test and Wooldridge test for serial correlation were performed by using STATA software. Fixed and random regression analysis was used to test the Hypothesis of study and to establish the relationship between the dependent variable firm performance and the independent variables of corporate governance

Keywords: Corporate Governance, Working Capital Management, Sustainable Returns, Multiple-linear regression analysis, Board composition.

DOI: 10.7176/EJBM/17-2-09

Publication date: February 28^th 2025