Determinants of Corporate Governance in Textile Sector of Pakistan

Abstract

The study attempts to investigate the relationship of corporate ownership, size of the firm and investment opportunities with corporate governance in textile sector of Pakistan with a data of 10 firms listed in Karachi stock exchange. The firms have been selected on the grounds of coverage of market capitalization of overall textile sector. The data collected is for the period of 2008 to 2012. A measure to calculate corporate governance, unique to Pakistani context has been applied. A regression model is used to analyze the data. The statistical analysis has shown a bit unconventional results as the ownership concentration has been found to be positively impacting the corporate governance practices. Investment opportunities and size of the firm have been experienced to be mildly positively influencing the corporate governance practices. A correlation model is also applied to check the relationship between corporate governance and corporate valuation. Results have revealed that corporate governance and corporate valuation are positively and fairly correlated.