CORPORATE GOVERNANCE CHARACTERISTICS AND FIRM PROFITABILITY: EMPIRICAL EVIDENCE FROM EMERGING EQUITY MARKET

Firm profitability is the capacity of any business to acquire benefits. A benefit is the left of income that business produce after it pay all direct and indirect expenses related to the generation of revenue. Recently, firm profitability increase consideration in the modern research literature. In developing countries like Pakistan, firm profitability is a main and important element to support its budgetary demands. Therefore, this study tries to find the impact of corporate governance on firm profitability of listed firms in Pakistan stock exchange. The time frame of study is 6 years on annual bases started from 2013 to 2018. It is found that corporate governance mechanism i.e. board size, number of independent directors, gender diversity has significant association with firm profitability. Besides that, it uses firm characteristics as control variables like leverage, firm size, capital intensity. Finally, study has policy implication for government, policy makers, investors and other stakeholders in Pakistan