Impact of corporate governance on capital structure of Pakistani firms

Document Type

Conference Proceeding


Edith Cowan University - School of Business and Law


School of Business and Law




Originally published as:

Shakri, I.H., Yong, J., Xiang, D., & Djajadikerta, H. (2017). Impact of corporate governance on capital structure of Pakistani firms. In Proceedings of the 2nd Business Doctoral and Emerging Scholars Conference.

Original article available here.


The purpose of this study is to empirically test the impact of corporate governance measures on the capital structure choices of oil and gas industry of Pakistan. Pooled Ordinary Least Square Model was employed to test the data is collected from PSE-30 index form 2006-2015 from their published annual reports. The results showed that number of committees at the board are positively and significantly associated with the financing decisions of the firms. However, board independence showed a negative but insignificant relation with the leverage ratio. Other explanatory variables showed no relation with the financing decisions. The control variables firm age and firm size are positively while profitability and shareholder equity are significantly but negatively related with the leverage ratio. The findings of this study will help corporate managers in the formulating the optimal capital structure. This study is significant for the policy makers to make new regulations to work more effectively in the corporate governance sector of Pakistan. It will also fill the gap of available literature on corporate governance in Pakistan.