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INVESTIGATING THE STOCHASTIC RELATIONSHIP BETWEEN OWNERSHIP AND FIRM FINANCIAL PERFORMANCE: AN EVIDENCE FROM LISTED PSX (PAKISTAN STOCK EXCHANGE) SUGAR COMPANIES OF PAKISTAN

Muhammad Asif Joyo (), Waqas Mahmood () and Wajahutallh Khan ()
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Muhammad Asif Joyo: Lecturer at ILMA University, Karachi, Pakistan
Waqas Mahmood: Joint Director of ISD Department, State Bank of Pakistan, Karachi, Pakistan
Wajahutallh Khan: Lecturer at ILMA University, Karachi, Pakistan

IBT Journal of Business Studies (JBS), 2018, vol. 14, issue 1, 14-6

Abstract: The objective of the study is to investigate the stochastic relationship between ownership and firm financial performance. To achieve an objective, the panel data for the period of 9 yearshave been collected of the top 10 sugar producing companies listed on Pakistan StockExchange (PSX). The data extracted from annual financial statements and reports of sugar companies. The total 90 observations have been taken to conduct this study after total panel observations adjusted. In addition, some companies have been excluded on the basis of non- availability of data in order to ensure sufficiency of data. Total seven variables have beenapplied in this study, four independent variable (i.e. Board Size, Board Independent Directors, Board Audit Committee, and Owners Equity) and three dependent variables (i.e. Return on Assets (ROA), Return on Equity (ROE) and Earnings Per Share (EPS)).The study concluded and explained the significance of ownership with financial position and it showedthat the sugar Industry has good financial performance on the basis of results. In addition, corporate governance is considered as one of the extensively studied subject and helps in mitigating the divergence of interests among managers and investors. Board size shows negative association with return on assets as Board sizes decreases return on assets increases and vice versa. Furthermore, independent director & audit committee have positive relationwith the earning per share

Keywords: Board Size; Corporate governance; Financial Performance; Independent Directors (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:aib:ibtjbs:v:14:y:2018:i:1:p:14-6

DOI: 10.46745/ilma.ibtjbs.2018.141.06

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