Corporate Governance and Firm Performance: Empirical Evidence from Pakistan & India

Abstract What mechanism would use to measure the corporate governance? There has investigated the relationship between corporate governance and firm performance in Pakistan and India. Board Size, CEO duality and Institutional Shareholders, have selected as the corporate governance variables further ROA and ROE as measures of firm performance. Data extracted from the annual audited reports of 100 listed Non-Financial Companies from Pakistan and Indian Stock Exchange for the 2012-2015 financial years. This study sheds light for the finding of relationship. Regression results indicate that board size has negative relation with firm performance. This suggests that small board is related with the higher performance of firm. Moreover, the results relate that the separation of CEO and Chairman has a significant positive relationship with the firm performance in both countries. The non-executive directors on the board are not associated with the firm performance of the listed companies in Pakistan and India.