The Impact of Corporate Governance Practices on the Firm Financial Performance of the Non-Financial Firms

Abstract

The study focuses on whether the Corporate Governance characteristics influence the firm performance of Non-Financial Firms in Pakistan. In this study, three types of industries like pharmaceutical, cement, and food were analyzed from the Pakistan Stock Exchange for the period of 2010 to 2019. The authors used the diagnostic test on data that argued that the model is better, like the fixed effect model or random-effect model for analysis. Multiple regression-based methodologies were developed to use a fixed-effect model for both dependent variables, Return on Assets and Tobin-Q variables, to discover the association between corporate governance and firm performance. It is concluded that board size, board education board experience, board nationality and board compensation have significant the ROA and board size, board experience, the board size, and board compensation shows significance with Tobin-Q.