EFFECTIVENESS OF BOARD STRUCTURE MODELS AND FIRM'S PERFORMANCE: EVIDENCE FROM PAKISTAN'S TEXTILE SECTOR

Abstract

The study intends to identify the factors influencing corporate governance of textile firms in Pakistan, as the textile sector is fundamental role perform in Pakistan economy. Consequently, it is essential to explore the intricacies of corporate governance within the textile sector to enhance its performance. The research employs panel data from 99 companies that are listed on the Pakistan Stock Exchange, over the years 2007 to 2022, with published financial reports from the textile sector. The researcher uses the system GMM variables like profit instead of ROA, governance performance taken as CEO experience, firm efficiencies consider a stock return in regression method for analysis. This method is employed when encountering heteroskedasticity of an indeterminate kind, utilising the Generalised Method of Moments (GMM). GMM leverages orthogonality criteria to facilitate efficient estimate amid heteroskedasticity of uncertain shape. The research examines the influence of corporate governance on the success of textile firms. The return on assets functions as an indicator of company performance, whereas the market value of stocks and the age of the firm are used as measures of firm size and complexity; these variables were utilised to examine corporate governance. The study revealed that company performance favourably influences stock returns, return on assets, and firm size, but leverage and corporate governance have negative impacts.