THE EFFECT OF CEO DUALITY AND INSTITUTIONAL OWNERSHIP ON CAPITAL STRUCTURE DECISION: EVIDENCE FROM THE LISTED CHEMICAL FIRMS ON PSE

This research is conducted to examine the effect of CEO duality and institutional ownership on capital structure decision of listed chemical firms in Pakistan. For this purpose, all of the 28 firms of chemical industry listed on Pakistan Stock Exchange, Pakistan from year 2013 to 2019 were analyzed. For accomplishment of research objectives, annual audited reports were used for data collection. The research hypotheses were tested by deploying Pearson's product-moment correlation analysis and dynamic generalized method of moments panel data regression model. The findings indicated that CEO duality has positive and significant effect on capital structure, however institutional ownership negatively and significantly affect capital structure. The outcomes document that one person owing the position of chairman and chief executive officer maintain high debt level in capital structure. In addition, institutional owners strive to balance the debt and equity level in order to mitigate risk to protect the entire stakeholders and enhance corporate performance.