The Corporate Governance and Interdependence of Investment and Financing Decisions of Non-Financial Firms in Pakistan

Muhammad Farhan Basheer*, Salman Khan, Saira Ghulam Hassan and Muzafar Hussain Shah
Additional contact information
Muhammad Farhan Basheer*: School of Economics, Finance & Banking (SEFB), College of Business (COB), University Utara Malaysia (UUM), Malaysia
Salman Khan: Public Policy and Good Governance, Political Science, University of Passau, Germany
Saira Ghulam Hassan: School of Economics, Finance & Banking (SEFB), College of Business (COB), University Utara Malaysia (UUM), Malaysia
Muzafar Hussain Shah: School of Economics, Finance & Banking (SEFB), College of Business (COB), University Utara Malaysia (UUM), Malaysia

The Journal of Social Sciences Research, 2018, 316-323 Special Issue: 5

Abstract: This study investigates the interdependence between financing and investment decisions in the presence of corporate governance factors of three hundred non-financial companies listed on the emerging market of Pakistani Stock Exchange (PSX). The sample is chosen randomly over a five-year period from 2012 to 2017. Using a panel data methodology, the regression models are derived based on the simultaneous equation modeling. Four factors of corporate governance mechanisms are identified: family ownership, managerial ownership, board size and board composition. This is among the earliest studies in Pakistan to consider simultaneity of financing and investment decisions by adopting Panel Data estimation technique. The major contributions of this study are: first, financing and investment decisions must be determined simultaneously. The results show that both investment and financing have positive impacts on each other and there exists a simultaneity among them.

Keywords: Financing; Investment; Corporate governance; 2SLS. (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.arpgweb.com/pdf-files/spi5.70.316.323.pdf (application/pdf)
https://www.arpgweb.com/journal/7/special_issue/12-2018/5/4 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:arp:tjssrr:2018:p:316-323

Access Statistics for this article

The Journal of Social Sciences Research is currently edited by Dr. Paola Magnano

More articles in The Journal of Social Sciences Research from Academic Research Publishing Group Rahim Yar Khan 64200, Punjab, Pakistan.
Bibliographic data for series maintained by Managing Editor ().