Impact of Board Characteristics, Firm Level Factors and Political Connections on Cost of Capital: Evidence from Pakistan
The purpose of the study is to analyze the impact of board characteristics, firm level factors and political connections on cost of capital. The sample of study comprises of 175 non-financial companies listed on Pakistan Stock Exchange from 2008 to 2021. Fixed effect model is used for analysis of d...
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| Format: | Article |
| Language: | English |
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International Research Alliance for Sustainable Development - iRASD
2022-06-01
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| Series: | iRASD Journal of Management |
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| Online Access: | https://www.journals.internationalrasd.org/index.php/jom/article/view/846 |
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| author | Muhammad Bilal Ijaz Awais Javeed Sahar Afshan |
| author_facet | Muhammad Bilal Ijaz Awais Javeed Sahar Afshan |
| author_sort | Muhammad Bilal Ijaz |
| collection | DOAJ |
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The purpose of the study is to analyze the impact of board characteristics, firm level factors and political connections on cost of capital. The sample of study comprises of 175 non-financial companies listed on Pakistan Stock Exchange from 2008 to 2021. Fixed effect model is used for analysis of data. The findings revealed that Increasing board independence and leverage has a negative influence on the cost of capital. Whereas, Board size, Audit committee size impact the cost of capital positively. The study resolute that the cost of capital is not influenced by political connections, firm size, or institutional ownership. The research identified that there was a decline in the cost of capital, along with an increase in board independence and leverage. In addition, the cost of capital is unaffected by political connections, the size of firms and institutional shareholdings. In contrast, the cost of capital grew due to an increase in the size of the Board and the Audit Committee. The study suggests that In Pakistan non-financial firm’s maximum family own business and very low focus on management and foreign owners. Alternative prospective of managerial and foreign ownership firms should minimized the agency problems as family ownership. And for the best improvement of corporate governance board of directors should bring a transparency, accountability and fairness financial reporting.
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| format | Article |
| id | doaj-art-c81e348de0884e3b84b3abb3b18cac79 |
| institution | OA Journals |
| issn | 2709-8443 2709-8451 |
| language | English |
| publishDate | 2022-06-01 |
| publisher | International Research Alliance for Sustainable Development - iRASD |
| record_format | Article |
| series | iRASD Journal of Management |
| spelling | doaj-art-c81e348de0884e3b84b3abb3b18cac792025-08-20T01:53:26ZengInternational Research Alliance for Sustainable Development - iRASDiRASD Journal of Management2709-84432709-84512022-06-014210.52131/jom.2022.0402.0087Impact of Board Characteristics, Firm Level Factors and Political Connections on Cost of Capital: Evidence from PakistanMuhammad Bilal Ijaz0Awais Javeed1Sahar Afshan2University of Gujrat, Gujrat, Pakistan.University of Gujrat, Gujrat, Pakistan.University of Gujrat, Pakistan. The purpose of the study is to analyze the impact of board characteristics, firm level factors and political connections on cost of capital. The sample of study comprises of 175 non-financial companies listed on Pakistan Stock Exchange from 2008 to 2021. Fixed effect model is used for analysis of data. The findings revealed that Increasing board independence and leverage has a negative influence on the cost of capital. Whereas, Board size, Audit committee size impact the cost of capital positively. The study resolute that the cost of capital is not influenced by political connections, firm size, or institutional ownership. The research identified that there was a decline in the cost of capital, along with an increase in board independence and leverage. In addition, the cost of capital is unaffected by political connections, the size of firms and institutional shareholdings. In contrast, the cost of capital grew due to an increase in the size of the Board and the Audit Committee. The study suggests that In Pakistan non-financial firm’s maximum family own business and very low focus on management and foreign owners. Alternative prospective of managerial and foreign ownership firms should minimized the agency problems as family ownership. And for the best improvement of corporate governance board of directors should bring a transparency, accountability and fairness financial reporting. https://www.journals.internationalrasd.org/index.php/jom/article/view/846Cost of CapitalFirm Level FactorsBoard CharacteristicsCorporate Governance |
| spellingShingle | Muhammad Bilal Ijaz Awais Javeed Sahar Afshan Impact of Board Characteristics, Firm Level Factors and Political Connections on Cost of Capital: Evidence from Pakistan iRASD Journal of Management Cost of Capital Firm Level Factors Board Characteristics Corporate Governance |
| title | Impact of Board Characteristics, Firm Level Factors and Political Connections on Cost of Capital: Evidence from Pakistan |
| title_full | Impact of Board Characteristics, Firm Level Factors and Political Connections on Cost of Capital: Evidence from Pakistan |
| title_fullStr | Impact of Board Characteristics, Firm Level Factors and Political Connections on Cost of Capital: Evidence from Pakistan |
| title_full_unstemmed | Impact of Board Characteristics, Firm Level Factors and Political Connections on Cost of Capital: Evidence from Pakistan |
| title_short | Impact of Board Characteristics, Firm Level Factors and Political Connections on Cost of Capital: Evidence from Pakistan |
| title_sort | impact of board characteristics firm level factors and political connections on cost of capital evidence from pakistan |
| topic | Cost of Capital Firm Level Factors Board Characteristics Corporate Governance |
| url | https://www.journals.internationalrasd.org/index.php/jom/article/view/846 |
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