Ownership Structure, Corporate Governance and Capital Structure: Evidence from Countries having FPI in Pakistan



This study examines the relationship between ownership structure, corporate governance and firm leverage of listed companies in developing and developed equity market, having foreign portfolio investment in Pakistan since 2002. The sample period in this study is 2010 to 2016 for which firm level data for top 10 non-financial listed companies selected from stock exchange of each country has been observed by using pool regression analysis under common effect model approach. The measures of corporate governance variable are firm board size, Number of NED’s in board and CEO/Chairman duality. The measure of ownership structure are examined by managerial shareholders and institutional shareholders. Same impact of control variables are measure through size of firm and firm profitability.  Results showed that firm board size and managerial shareholders is significantly negative relationship with leverage of firm. But corporate financing is found insignificantly influenced by CEO/Chairman duality and the existence of NED’s on the firm board. The control variables size of firm and firm profitability are found to have a significant impact on financing decision. Therefore results of the study suggest that corporate governance variables like ownership structure and firm board size play important role in the setting of financial decision of firm.

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Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.