Impact of Corporate Governance & Capital Structure on Firm Financial Performance: Evidence from Listed Cement Sector of Pakistan

Abstract

The motivation behind the research is to investigate and examine the important components that impact on capital structure & corporate governance on firm’s budgetary performance related to listed cement industry of Pakistan. It made use of auxiliary information from audited financial statements of 10 listed cement organizations at Pakistan Stock Exchange (PSX) since 2007 to 2016 using Pooled regression Model to examine the Hypothesis. The study used three dependent variables to measured the firm performance they (ROA, ROE, NPR), and four independent variable to measured the corporate governance and capital structure and they are (Board Size, Audit Committee, LTDR & STDR). Observational outcomes researched that transient obligation proportion and Long haul debt proportion has significantly influence with ROA & NPR. Furthermore, board size and audit committee has insignificant association with the firm financial performance. Consequently, the research stated that ROE has inconsequential whether negative or positive association with all the independent variables namely Board size, Audit Committee, STDR, and LTDR. The result of the study is value to both academics and policy makers.

Keywords: Corporate Governance, Capital Structure, Firm Performance, Audit Committee, ROA, ROE, NPR, LTDR, STDR, Cement Industry.