Abstract:
This study investigates the relationship between corporate governance, capital structure and financial performance of petroleum firms registered in Pakistani Stock Exchange. This study has considered corporate governance (board size and number of shareholders) and capital structure (long-term debt and short-term debt) as independent variable. Whereas, financial performance (return on asset and return on equity) is considered as dependent variable. However, petroleum firms registered in Pakistani Stock Exchange have been the sector chosen to investigate the relationship between variables mentioned above. Historical data regarding these variables have been collected from the period of 2015 – 2019 (5 years) through secondary sources of data (annual financial statements). However, statistical tests (such as descriptive statistics, correlation and regression) have been used primarily to identify the relationship between variables of this study. Results have been drawn through statistical tests with the help of Stata software. Based on the findings, corporate governance (board size and number of shareholders) and capital structure (long-term debt and short-term debt) has positive impact on financial performance (return on assets and return on equity) of petroleum firms registered in Pakistani Stock Exchange. Conclusively, this study has found out that corporate governance and capital structure significantly impacts financial performance of petroleum firms registered in Pakistani Stock Exchange.
