THE EFFECT OF CAPITAL STRUCTURE AND CORPORATE GOVERNANCE ON FINANCIAL PERFORMANCE OF PAKISTAN'S OIL & GAS SECTOR

Abstract

Purpose: The aim of this study tends to determine the effect of (CS) Capital Structure and Corporate Governance on the firm performance. This research is based on the oil and gas companies working in Pakistan. The research problem highlighted in this study is related to examining the (CG) corporate governance framework which is not well researched in Pakistan. However, capital structure has been researched and studied but, specifically variables like STD & LTD along with Board Size and shareholding aren’t studied singly. This research has been conducted to answer the research question: What are the effect seen from the structure of capital and corporate governance on the financial performance of Pakistan’s oil and gas sector? Methodology & Design: The methodology for this study is quantitative while the data has been gathered from secondary sources. The research design for this study is explanatory while, the approach is deductive. The analysis is conducted using OLS regression, Hausman test and Descriptive statistics. Findings: The findings from our research shows that, all the variables (Board Size, number of shareholders, long term debt and short-term debt) can explain return on assets of oil and gas sector of Pakistan up to 84.3 percent and 52 percent while F-statistics found that all the independent variables significantly predict dependent variable.