Impact of Ownership Structure and Board Composition on Firm Performance in Banking Sector of Pakistan

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Muhammad Jalal Khan, Muhammad Kamran, Muhammad Imran

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Published: 2 March 2020 | Article Type :

Abstract

This study investigates the impact of board composition and ownership structure on firm performance. For the present study, a sample of 20 listed financial firms has been taken from Pakistan Stock Exchange (PSX), for which secondary data for the period of 2007 to 2016 was collected from annual reports of each bank and financial statement analysis of State bank of Pakistan. The firm performance is taken as a dependent variable, which is measured by Return on Asset and Net Interest Margin while Board Composition and Ownership Structure is taken as independent variables. Moreover, Firm Size, Liquidity, Age and Growth is taken as control variables. The empirical results indicate that the Board Size, Board Independence, Gender, Insider Ownership, Liquidity, And Age have no significant impact on firm performance while the finding of Managerial Ownership, Firm Size have a significant impact on firm performance and growth result show a negative impact on firm performance. Furthermore, Board Independence, Gender, Managerial Ownership, Insider Ownership, Firm Size, Growth & Liquidity have no significant impact on firm performance despite that Board Size and Age have a significant impact on firm performance as measured by Jackling and Johl (2009), Majumdar (1997).

Keywords: Board Composition, Ownership Structure, NIM,ROA.

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Muhammad Jalal Khan, Muhammad Kamran, Muhammad Imran. (2020-03-02). "Impact of Ownership Structure and Board Composition on Firm Performance in Banking Sector of Pakistan." *Volume 3*, 1, 45-55