Impact of board attributes on stock liquidity: evidence from Pakistani panel data

Javed Khan, Shafiq Ur Rehman and Inayat Khan

Journal of Accounting in Emerging Economies, 2022, vol. 13, issue 1, 118-134

Abstract: Purpose - This study investigates the impact of board characteristics on the stock liquidity of Pakistani listed non-financial firms for the period 2007–2016. Design/methodology/approach - The study uses fixed-effects regression model on a sample of 170 non-financial firms listed on the Pakistan Stock Exchange for regressing the impact of board attributes on stock liquidity while for addressing the endogeneity two-stage least-square (2SLS) and lagged structure models are used. Findings - The study finds that board meetings (BM), directors' attendance (DAT) at BM, board gender diversity, the number of board subcommittees (NBC) and board foreign diversity (BFD) positively affect stock liquidity. Checking the robustness through 2SLS and lagged structure models, it is suggested that the findings are robust to the problem of endogeneity. Practical implications - Outcomes of the study signify the role of novel board attributes in improving the stock liquidity which has implications for investors, the board of directors and policymakers. Originality/value - The authors are the first to investigate the impact of novel board attributes–BFD, directors' remuneration (DR), DAT and the number of board sub-committees on stock liquidity. Up to the best of researchers' knowledge, these board attributes have never been examined before in relation to stock liquidity.

Keywords: Board foreign diversity; Board committees; Directors' attendance; Directors' remuneration; Board meetings (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jaeepp:jaee-06-2021-0207

DOI: 10.1108/JAEE-06-2021-0207

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