Corporate Governance, Stock Market Return and Firm Valuation: Empirical Evidence from Pakistan Corporate Governance, Stock Market Return and Firm Valuation: Empirical Evidence From Pakistan

Abstract

The purpose of this study is to test the relationship between corporate governance and stock market return. Alongside we have also tested whether good corporate governance increases the firm value. The proxies of corporate governance are board size, CEO duality, board independence and insider shareholdings. To get firm value we have used ROA, ROE and Tobin Q. To test this relationship we incorporated the financial and governance data of 64 non-financial firms listed on the Pakistan Stock Exchange for the period of 10 years, starting from 2010 to 2019. We have chosen firms from all sectors of PSX to incorporate diversity in data except banks and other financial institutions. We have used estimated generalized least squares and our result showed the significance of corporate governance on firm value and stock market return.