Effect of corporate governance on default risk of oil and gas industry in Pakistan: listed on KSE100 index

Abstract

This study is focused mainly on identifying the effect of corporate governance on default risk of oil and gas industry in Pakistan: listed on KSE 100 Index. In this study, board size, CEO duality, board independence, and ownership structure, representing corporate governance, are considered as independent variables. Whereas, default risk is considered as the dependent variable within this study. This study has selected oil and gas industry of Pakistan and targeted the officials of oil and gas firms to collect the data to be used within this study. Research instrument used within this study for the collection of data from respondents has been the structured questionnaire. Data gathered from the respondents (officials of oil and gas firms of Pakistan) is analyzed through multiple statistical instruments. Various statistical instruments that are used primarily to analyze the relationship between these variables includes descriptive frequencies, reliability, correlation, regression, ANOVA, coefficient etc.The results interpreted through correlation and regression by the help of SPSS software have shown the significant effect that corporate governance (board size, CEO duality, board independence, and ownership structure) has over default risk of oil and gas industry in Pakistan: listed on KSE 100 Index. Based on the findings, it has been concluded that board size, CEO duality, board independence, are having significant positive impact on the default risk, whereas ownership structure is having a negative effect on default risk of oil and gas industry in Pakistan: listed on KSE 100 Index