An interaction between financial practices and firm performance with moderating effect of agency cost in Pakistani corporate sector

This study investigates the application of firms’ financial practices and its impact on firms’ performance in economic conditions of an emerging market of Pakistan. Firm’s financial practices include capital structure decisions, dividend policy decisions, investment appraisal techniques, working cap...

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Main Author:	Muneer, Saqib
Format:	Thesis
Language:	English
Published:	2015
Subjects:	HD28 Management Industrial Management
Online Access:	http://eprints.utm.my/id/eprint/54855/1/SaqibMuneerPFM2015.pdf
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spelling	my-utm-ep.548552020-11-09T06:14:08Z An interaction between financial practices and firm performance with moderating effect of agency cost in Pakistani corporate sector 2015-06 Muneer, Saqib HD28 Management. Industrial Management This study investigates the application of firms’ financial practices and its impact on firms’ performance in economic conditions of an emerging market of Pakistan. Firm’s financial practices include capital structure decisions, dividend policy decisions, investment appraisal techniques, working capital policy, methods of measuring cost of capital and financial assessment using financial ratios. This study analyzes the primary data of both financial and non-financial firms listed at Karachi Stock Exchange (KSE) of Pakistan. Data from 141 firms were analyzed using descriptive and factor analyses along with linear and multiple regression techniques to investigate the relationships between financial practices and firms' performance. The magnitude and significance of the moderating effect of agency cost was examined using multiple regression analysis on the relationship between capital structure decisions and dividend policy decisions with firms’ performance. The descriptive findings of the study demonstrate that financial practices are followed in Pakistani corporate sector and are considered very important for a firm’s performance. Results show that capital structure decisions and dividend policy decisions have a significant positive impact on firms’ performance. In a similar vein, investment appraisal techniques, working capital policy, methods of measuring cost of capital and performance assessment using financial ratios are found to be significantly related to firms’ performance. Furthermore, agency cost does not only exert a significant impact on firms’ performance, but also moderates the relationship between dividend policy decisions and firms’ performance. However, agency cost does not moderate the relationship between capital structure decisions and firms’ performance. The study has both theoretical and practical implications for managers and practitioners about the magnitude of each financial practice in relation to agency costs and their contribution in the firms’ performance. 2015-06 Thesis http://eprints.utm.my/id/eprint/54855/ http://eprints.utm.my/id/eprint/54855/1/SaqibMuneerPFM2015.pdf application/pdf en public http://dms.library.utm.my:8080/vital/access/manager/Repository/vital:96060 phd doctoral Universiti Teknologi Malaysia, Faculty of Management Faculty of Management
institution	Universiti Teknologi Malaysia
collection	UTM Institutional Repository
language	English
topic	HD28 Management Industrial Management
spellingShingle	HD28 Management Industrial Management Muneer, Saqib An interaction between financial practices and firm performance with moderating effect of agency cost in Pakistani corporate sector
description	This study investigates the application of firms’ financial practices and its impact on firms’ performance in economic conditions of an emerging market of Pakistan. Firm’s financial practices include capital structure decisions, dividend policy decisions, investment appraisal techniques, working capital policy, methods of measuring cost of capital and financial assessment using financial ratios. This study analyzes the primary data of both financial and non-financial firms listed at Karachi Stock Exchange (KSE) of Pakistan. Data from 141 firms were analyzed using descriptive and factor analyses along with linear and multiple regression techniques to investigate the relationships between financial practices and firms' performance. The magnitude and significance of the moderating effect of agency cost was examined using multiple regression analysis on the relationship between capital structure decisions and dividend policy decisions with firms’ performance. The descriptive findings of the study demonstrate that financial practices are followed in Pakistani corporate sector and are considered very important for a firm’s performance. Results show that capital structure decisions and dividend policy decisions have a significant positive impact on firms’ performance. In a similar vein, investment appraisal techniques, working capital policy, methods of measuring cost of capital and performance assessment using financial ratios are found to be significantly related to firms’ performance. Furthermore, agency cost does not only exert a significant impact on firms’ performance, but also moderates the relationship between dividend policy decisions and firms’ performance. However, agency cost does not moderate the relationship between capital structure decisions and firms’ performance. The study has both theoretical and practical implications for managers and practitioners about the magnitude of each financial practice in relation to agency costs and their contribution in the firms’ performance.
format	Thesis
qualification_name	Doctor of Philosophy (PhD.)
qualification_level	Doctorate
author	Muneer, Saqib
author_facet	Muneer, Saqib
author_sort	Muneer, Saqib
title	An interaction between financial practices and firm performance with moderating effect of agency cost in Pakistani corporate sector
title_short	An interaction between financial practices and firm performance with moderating effect of agency cost in Pakistani corporate sector
title_full	An interaction between financial practices and firm performance with moderating effect of agency cost in Pakistani corporate sector
title_fullStr	An interaction between financial practices and firm performance with moderating effect of agency cost in Pakistani corporate sector
title_full_unstemmed	An interaction between financial practices and firm performance with moderating effect of agency cost in Pakistani corporate sector
title_sort	interaction between financial practices and firm performance with moderating effect of agency cost in pakistani corporate sector
granting_institution	Universiti Teknologi Malaysia, Faculty of Management
granting_department	Faculty of Management
publishDate	2015
url	http://eprints.utm.my/id/eprint/54855/1/SaqibMuneerPFM2015.pdf
_version_	1747817742192345088

An interaction between financial practices and firm performance with moderating effect of agency cost in Pakistani corporate sector

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