CORPORATE GOVERNANCE IMPACT ON CAPITAL STRUCTURE

Abstract

The aim of this research is to analyze the impact of corporate governance on capital structure of Pakistani firms. The sample include in this research consist of 30 companies. Ordinary least square method of regression is used to determine the relationship between coiporate governance attributes and capital structure of organizations. The analysis shows that although the corporate governance structure of Pakistani companies is not very well developed, but coiporate governance variable impact the capital structure of Pakistani companies to some extent. The result achieved suggests that board composition, CEO duality, ownership concentration, and profitability are negatively related to debt ratio and is statistically significant. This shows if we increase any of these variables the debt ratio decreases. Board size shows positive and significant relationship with the debt ratio, director remuneration shows positive and insignificant relationship with the debt ratio. Tangibility of assets and size of firm shows positive insignificant relationship with the debt ratio.