Abstract:
This present study is to investigate the relationship between corporate governance and firm value in financial sector of Pakistan, the study includes sample of 50 KSE listed financial companies. For this purpose, a corporate governance index has been constructed by using three sub-indices (ownership structure disclosure, board and management structure disclosure and financial transparency disclosure. The corporate governance index of present financial sector of Pakistan has been analyzed by using the 21 attributes. The simple regression analysis was used to determine the relationship between the corporate governance index and value of firm. We use Tobin’s Q as measure of firm value and used advanced econometric technique to conduct the in-depth analysis. The relationship between the variables was determined by conducting ordinary least square (OLS). The findings of this study reveal significant positive relationship between corporate governance index and firm value. It is concluded that more disclosure of information has positive impact on firm profitability. The study also found the disclosure at higher side in Pakistani firms. The study found the negative relationship between ownership structure disclosure and firm value. While the board management structures and financial information disclosure has significant positive relationship with firm profitability.
