1) The study examines the impact of female directors and board size on the financial performance of textile firms in Pakistan. Data is collected from 11 textile firms over 2008-2012.
2) Regression analysis finds a negative relationship between board size and earnings per share, but no significant relationship with return on assets. The number of female directors is negatively correlated with return on assets but not significantly related to earnings per share.
3) Firm size, used as a control variable, is positively but not significantly related to earnings per share but positively and significantly related to return on assets. The regression models explain 60-70% of the variation in performance.
International Journal of Business and Management Invention (IJBMI)inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
International Journal of Business and Management Invention (IJBMI)inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
The Impact of Entrepreneurial Orientation on Business Performance: A Study of...ijtsrd
The present study aims to examine the impact of entrepreneurial orientation on business performance of 30 horticulture related firms in Kashmir. The entrepreneurial orientation is measured by five dimensions identified from the literature on the subject and financial performance; a dependent variable, is treated as a measurement for business performance. The correlation and regression analysis was used to analyze the relationship between entrepreneurial orientation and business performance of the sampled firms. Sameer Ahmad Shalla"The Impact of Entrepreneurial Orientation on Business Performance: A Study of SMEs in Horticulture Sector" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-1 | Issue-5 , August 2017, URL: http://www.ijtsrd.com/papers/ijtsrd2291.pdf http://www.ijtsrd.com/management/strategic-management/2291/the-impact-of-entrepreneurial-orientation-on-business-performance-a-study-of-smes-in-horticulture-sector/sameer-ahmad-shalla
Individual and Business Environment: How Effective Interaction Affects SME De...Dr. Amarjeet Singh
Exploring and conceptualizing different aspect of
entrepreneurship is top priority of policymakers at present
days. Importance of entrepreneurial research is increasing
day by day in the present complex and changing business
environment. In this regard, it has become absolutely
pertinent to re-examine the mechanism of interaction
between environment and personality in entrepreneurial
ecosystem to understand its impact on entrepreneurial
development on MSME perspectives. Perfect interaction of
personality characteristics with institutional variables can
lead towards sustainable development. Significant personality
characteristics or optimum business environment can’t alone
make any difference. It is the magnitude of proper interaction
between them which can increase the resultant vector in
many folds. An attempt has been made in this paper to
identify the significant interaction variables that can create
impact during different entrepreneurial growth stage. The
research is of a dynamic and multiregional structure and was
conducted on the target sample based on the longitudinal
study of GEDI (Global Entrepreneurship Development
Institute report) report 2012-2016. The study confirms that
interaction within ecosystem is complex as well as different in
nature for different stage of business. The present study also
explores the intricate situation and developed a suitable
model for each stage of business development. The most
notable part of this study is considering the heteroscedasticity
and autocorrelation of the data. Panel Corrected Standard
Error (PCSE) model has been used in our paper. The analysis
of the present study indicates the positive and negative
interaction variables for each stage of business development
that can be used for policy making considering the present
situation of the country.
Notation Used: In equation [1], [2], [3], i indicates
individual Country, t indicates year, indicate Nascent
Entrepreneurship Rate, Established Business Ownership Rate
and Sustainability. α and β are coefficients and € indicate
error term. In equation [4] X represents the explanatory
variables, whereas Ω is the covariance matrix for all error
terms.
Employee Turnover Intention and Job SatisfactionIJAEMSJORNAL
Today it became a huge challenge for Human Resource Managers to retain the employees for longer time of period and decrease the rate of employee turnover. The main research objective is to find out the correlation between job satisfaction and employee turnover intention in private hospital in Erbil. A quantitative method was used to analyze the current study. 144 participants were involved in this study from private hospital in Erbil. The correlation between job satisfaction factor as independent factor and turnover as dependent factor, the value of R for the Job satisfaction is =.386** which indicates that turnover is a positive and weak correlation with turnover intention. The coefficients analysis for this study, the value Beta for turnover is = .386> 0.01, which supported the research hypothesis. This study showed that the there is a positive correlation between job satisfaction and employee turnover. Finally, on the turnover intentions of private hospital personnel in Erbil, most of them would quit in case if they have a better opportunities.
A Study on Working Capital Management on M S.SGE Innovative Toolcraftt Pvt. Ltd.ijtsrd
Working Capital is one of the most vital functions of business management. Every organization needs sufficient amount of working capital for extent and improve in nature of business which may be a private or public, whether profit oriented or not. The most critical factor is to be maintaining existence, liquidity, solvency and accomplishment of the any business organization for the proficient working capital management. Ms. R. Mahalakshmi | Dr. S. Venkatesh "A Study on Working Capital Management on M/S.SGE Innovative Toolcraftt Pvt. Ltd." Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-4 | Issue-3 , April 2020, URL: https://www.ijtsrd.com/papers/ijtsrd30617.pdf Paper Url :https://www.ijtsrd.com/management/accounting-and-finance/30617/a-study-on-working-capital-management-on-mssge-innovative-toolcraftt-pvt-ltd/ms-r-mahalakshmi
A STUDY ON PERFORMANCE MANAGEMENT IN BMTC WITH SPECIAL REFERENCE TO DIVISIONSIAEME Publication
A financial performance management is essential for every company to know the position of the business in this competitive world which helps them to analyse their strength and weakness. It analyses four years of data. This research study has been done with regards to divisions of BMTC in Bangalore. For the study purpose, secondary data have been collected from the annual report of these divisions for the period of four years starting from 2017-2020. Data has been analysed by applying one-way ANOVA. From the analysis, it has been concluded that there is a statistically significant difference in financial performance of these divisions based on the components like kilometre per litre top up oil, Total Vehicles, average vehicles on road and staff productivity of different zones. The expenses incurred with different zones have been analysed. It has been found from the study BMTC remains in standing Position compared to all other divisions between East, west, north, south and central zones. This also helps us to analyse the revenue and expenditure of the BMTC which gives information about financial health.
The aim of this study was to examine the effect of financial distress, rewards and company performance using return on assets (ROA), managerial ownership, ownership concentration, directors' composition and leverage on directors' remuneration with company size, leverage and company age as control variables. The study population comprised manufacturing companies in the food and beverage sector listed on the ASEAN state stock exchange. The study used a purposive sampling method. The sample number consisted of 68 manufacturing companies. The data used are secondary data obtained from ASEAN state stock exchanges. Data analysis used multiple linear regression. The results indicate that ROA, managerial ownership, ownership concentration, firm size and leverage have a significant effect on directors' remuneration, while financial distress, reward, company age and state have no significant effect on directors' remuneration. The implications of study mean that boards of directors can conduct a comprehensive evaluation of the directors' remuneration system by establishing a team that has the authority to provide input and formulation of a remuneration system that meets the principle of fairness.
The Impact of Entrepreneurial Orientation on Business Performance: A Study of...ijtsrd
The present study aims to examine the impact of entrepreneurial orientation on business performance of 30 horticulture related firms in Kashmir. The entrepreneurial orientation is measured by five dimensions identified from the literature on the subject and financial performance; a dependent variable, is treated as a measurement for business performance. The correlation and regression analysis was used to analyze the relationship between entrepreneurial orientation and business performance of the sampled firms. Sameer Ahmad Shalla"The Impact of Entrepreneurial Orientation on Business Performance: A Study of SMEs in Horticulture Sector" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-1 | Issue-5 , August 2017, URL: http://www.ijtsrd.com/papers/ijtsrd2291.pdf http://www.ijtsrd.com/management/strategic-management/2291/the-impact-of-entrepreneurial-orientation-on-business-performance-a-study-of-smes-in-horticulture-sector/sameer-ahmad-shalla
Individual and Business Environment: How Effective Interaction Affects SME De...Dr. Amarjeet Singh
Exploring and conceptualizing different aspect of
entrepreneurship is top priority of policymakers at present
days. Importance of entrepreneurial research is increasing
day by day in the present complex and changing business
environment. In this regard, it has become absolutely
pertinent to re-examine the mechanism of interaction
between environment and personality in entrepreneurial
ecosystem to understand its impact on entrepreneurial
development on MSME perspectives. Perfect interaction of
personality characteristics with institutional variables can
lead towards sustainable development. Significant personality
characteristics or optimum business environment can’t alone
make any difference. It is the magnitude of proper interaction
between them which can increase the resultant vector in
many folds. An attempt has been made in this paper to
identify the significant interaction variables that can create
impact during different entrepreneurial growth stage. The
research is of a dynamic and multiregional structure and was
conducted on the target sample based on the longitudinal
study of GEDI (Global Entrepreneurship Development
Institute report) report 2012-2016. The study confirms that
interaction within ecosystem is complex as well as different in
nature for different stage of business. The present study also
explores the intricate situation and developed a suitable
model for each stage of business development. The most
notable part of this study is considering the heteroscedasticity
and autocorrelation of the data. Panel Corrected Standard
Error (PCSE) model has been used in our paper. The analysis
of the present study indicates the positive and negative
interaction variables for each stage of business development
that can be used for policy making considering the present
situation of the country.
Notation Used: In equation [1], [2], [3], i indicates
individual Country, t indicates year, indicate Nascent
Entrepreneurship Rate, Established Business Ownership Rate
and Sustainability. α and β are coefficients and € indicate
error term. In equation [4] X represents the explanatory
variables, whereas Ω is the covariance matrix for all error
terms.
Employee Turnover Intention and Job SatisfactionIJAEMSJORNAL
Today it became a huge challenge for Human Resource Managers to retain the employees for longer time of period and decrease the rate of employee turnover. The main research objective is to find out the correlation between job satisfaction and employee turnover intention in private hospital in Erbil. A quantitative method was used to analyze the current study. 144 participants were involved in this study from private hospital in Erbil. The correlation between job satisfaction factor as independent factor and turnover as dependent factor, the value of R for the Job satisfaction is =.386** which indicates that turnover is a positive and weak correlation with turnover intention. The coefficients analysis for this study, the value Beta for turnover is = .386> 0.01, which supported the research hypothesis. This study showed that the there is a positive correlation between job satisfaction and employee turnover. Finally, on the turnover intentions of private hospital personnel in Erbil, most of them would quit in case if they have a better opportunities.
A Study on Working Capital Management on M S.SGE Innovative Toolcraftt Pvt. Ltd.ijtsrd
Working Capital is one of the most vital functions of business management. Every organization needs sufficient amount of working capital for extent and improve in nature of business which may be a private or public, whether profit oriented or not. The most critical factor is to be maintaining existence, liquidity, solvency and accomplishment of the any business organization for the proficient working capital management. Ms. R. Mahalakshmi | Dr. S. Venkatesh "A Study on Working Capital Management on M/S.SGE Innovative Toolcraftt Pvt. Ltd." Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-4 | Issue-3 , April 2020, URL: https://www.ijtsrd.com/papers/ijtsrd30617.pdf Paper Url :https://www.ijtsrd.com/management/accounting-and-finance/30617/a-study-on-working-capital-management-on-mssge-innovative-toolcraftt-pvt-ltd/ms-r-mahalakshmi
A STUDY ON PERFORMANCE MANAGEMENT IN BMTC WITH SPECIAL REFERENCE TO DIVISIONSIAEME Publication
A financial performance management is essential for every company to know the position of the business in this competitive world which helps them to analyse their strength and weakness. It analyses four years of data. This research study has been done with regards to divisions of BMTC in Bangalore. For the study purpose, secondary data have been collected from the annual report of these divisions for the period of four years starting from 2017-2020. Data has been analysed by applying one-way ANOVA. From the analysis, it has been concluded that there is a statistically significant difference in financial performance of these divisions based on the components like kilometre per litre top up oil, Total Vehicles, average vehicles on road and staff productivity of different zones. The expenses incurred with different zones have been analysed. It has been found from the study BMTC remains in standing Position compared to all other divisions between East, west, north, south and central zones. This also helps us to analyse the revenue and expenditure of the BMTC which gives information about financial health.
The aim of this study was to examine the effect of financial distress, rewards and company performance using return on assets (ROA), managerial ownership, ownership concentration, directors' composition and leverage on directors' remuneration with company size, leverage and company age as control variables. The study population comprised manufacturing companies in the food and beverage sector listed on the ASEAN state stock exchange. The study used a purposive sampling method. The sample number consisted of 68 manufacturing companies. The data used are secondary data obtained from ASEAN state stock exchanges. Data analysis used multiple linear regression. The results indicate that ROA, managerial ownership, ownership concentration, firm size and leverage have a significant effect on directors' remuneration, while financial distress, reward, company age and state have no significant effect on directors' remuneration. The implications of study mean that boards of directors can conduct a comprehensive evaluation of the directors' remuneration system by establishing a team that has the authority to provide input and formulation of a remuneration system that meets the principle of fairness.
Corporate Governance and Corporate Profitability Empirical Study of Listed La...ijtsrd
Corporate governance is concerned with ways in which all parties interested in the well- being of the organization attempt to ensure that mangers and other insiders take measures or adopt mechanisms that safeguard the interests of the stakeholders.. The purpose of the study is to find out the impact of corporate governance on profitability of listed Land and Property companies in Sri Lanka. Return of Assets is used as dependent variable. To measure the corporate governance, Board size, Board composition and independent directors of Remuneration committee. number of auditors are considered in this study. Firm size was considered as control variable in this study. The data were collected from firms annual financial reports and Data Stream over the period of 2011to 2016, from the CSE website. Descriptive statistics, correlation analysis, multiple linear regression analysis were used to analyse the data and examine the hypotheses by using the E-views 10 version, in this study. The findings revealed that there is a positive and significant relationship between ROA with auditors, board composition. Independent directors of Remuneration committee and board size are insignificantly correlated with ROA. Furthermore, it was found that the control variable firm size was insignificant in influencing firm performance ROA ..This study provides useful information for policy makers, regulators in improving the corporate governance policies in the future and also helps in increasing and understanding the relationship between corporate governance and firms performance. S. Anandasayanan | H. Thavarasasingam "Corporate Governance and Corporate Profitability: Empirical Study of Listed Land and Property Companies in Sri Lanka" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-3 | Issue-2 , February 2019, URL: https://www.ijtsrd.com/papers/ijtsrd20309.pdf
Paper URL: https://www.ijtsrd.com/management/accounting-and-finance/20309/corporate-governance-and-corporate-profitability-empirical-study-of-listed-land-and-property-companies-in-sri-lanka/s-anandasayanan
Majority of SMEs collapse because they operate in business environment which is highly turbulent characterized by external factors as well as internal business factors. The study therefore sought to establish the effect of effect of product creation strategy on performance of small and medium enterprises in Eldoret town. The study was guided by Balanced Scorecard Theory. This study adopted descriptive research design. The target population of the study was 2,391 registered SMEs according to Uasin Gishu County government records and accessible population was 1764 respondents. The sample size for the respondents was therefore be 315. The study used questionnaires as the main tool for collecting data. The data collected was analyzed by using the excel program and Statistical Package for Social Science (SPSS) version 23. Data was analyzed using descriptive statistics such as mean, frequencies, percentages and standard derivation and inferential statistics which include correlation and multiple regressions. Data was presented by use of frequency tables, charts and graphs. The study findings a positive and significant effect of product creation strategy on small and medium enterprises in Eldoret Town (β=0.476, p<0.05). The study will be of benefit to management of medium enterprises and other organizations in understanding the challenges they would encounter when implementing various strategies and be able to come up with better ways of dealing with these challenges so as to be successful in their strategies. The study would be of importance to future researchers and scholars since it would be a source of material for their research and would also help them in identifying the research gaps they need to fill.
Effect of Corporate Governance Committees and Financial Performance of Health...ijtsrd
This study examined empirically corporate governance committees and financial performance of healthcare companies. The independent variables are remuneration committees and nomination committees and independent variable was proxied with return on equity. The study used Ex Post Facto research design. Regression analysis was employed to test the hypotheses. The result showed that remuneration committee has a negative effect on return on assets, and this effect was not statistically significant at 5 level of significance. While nomination committee has a positive effect on return on assets, and this effect was statistically significant at 5 level of significance. It was suggested that the remuneration committee ensure that the appointed board members have an appropriate balance of skills to successfully discharge their duties. Unamma, Amaka Nkiru | Nwachukwu Raphael "Effect of Corporate Governance Committees and Financial Performance of Healthcare Companies in Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-7 | Issue-4, August 2023, URL: https://www.ijtsrd.com/papers/ijtsrd59782.pdf Paper Url:https://www.ijtsrd.com/management/accounting-and-finance/59782/effect-of-corporate-governance-committees-and-financial-performance-of-healthcare-companies-in-nigeria/unamma-amaka-nkiru
Idiosyncratic Effect of Corporate Solvency Management Strategies on Corporate...IOSR Journals
The study identifies and evaluates the association among corporate solvency management strategies and the corporate performance valuation in Chemical industry of Pakistan. The study uses purposive sampling or judgmental sampling for selecting 30 sample companies from the sector; covering 10 years financial statements data ranging from year 2002 to 2011. Balanced panel data is taken for the purpose of study. Levin, Lin & Chu test is used to check the stationarity of data whereas White Test is used to check the heteroskedasticity of data. Panel Least square technique with fixed effects is used to generalize the relationship between studied variables. The study observed that the performance of the chemical sector in terms of market to book value is affected by internal firm and industry specific factors related to solvency management strategic decisions. Findings of the study provide with the overview of historic performance and the potential performance of the selected sector to help policy makers including finance, economics and industry experts for creating value through the idiosyncratic resources.
Corporate Governance and Firm Performance: The Role of Transparency & Disclos...Muhammad Arslan
Purpose: This purpose of this paper is to empirically examine the relationship between transparency and disclosure and firm performance. Highlighting the importance of corporate governance in banking sector, the paper has focused in depth over its role, level and its impact on performance in banking industry of Pakistan. Design/methodology/approach: The paper access this purpose by constructing transparency and disclosure index for the past five year 2007-2011, using proxies for three sub-categories which are board and management structure disclosure, ownership structure disclosure and financial transparency disclosure. The paper also investigated structural changes of T&D Index and its effect on bank financial performance over the sample of 30 banks operating in Pakistan. Findings: Empirical analysis results by using ordinary least square regression model, reveals that financial performance is positively related to the transparency and disclosure and their sub levels except ownership structure disclosure which has negative relation with both ROA and ROE. Furthermore the average T&D level in Pakistani banking sector is above average. Practical implications: The current research paper aims for important policy implementation to reduce information asymmetry and improve corporate governance and firm performance in banking sector of Pakistan.
This study aims to determine the impact of intellectual capital on firm value, either directly or
indirectly through the company's financial performance in the financial sector. The population of this research
is 84 financial sector companies listed on the Indonesia Stock Exchange in 2020. The data analysis tool uses
path analysis with the help of the SPSS version 25 program
Intellectual Capital Effect On Financial Performance And Company Value (Empir...
123
1. 1
Impact of Female Directors and Board Size on Firm’s Performance:
Evidence from Textile Sector of Pakistan
Supervisor:
Asif Saeed
Govt. College University, Faisalabad.
Authors:
Ahmad Waleed
Govt. College University, Faisalabad.
Sadia Yousaf
Govt. College University, Faisalabad.
2. 2
Abstract
The textile sector of Pakistan is a well known textile industry in all over the world. 65 percent of
Pakistan’s earnings from foreign exchange depend upon textile industry solely. This industry has
problems relating to the corporate governance. These problems are obsolete mechanisms for
running these organizations. There is no doubt that the textile firms in Pakistan are large in size
and employment but are not so efficient as this type of large firms in all over the world. These
firms should introduce governance reforms in their systems in order to work efficiently,
effectively and make a competition with other large firms to get higher profits. In this study we
have selected eleven (11) leading textile firms. Data of each firm for five years is taken from
2008-2012. OLS Regression model is used as data analysis technique. We have made a research
in finding the relationship between firm performance (ROA, EPS) and gender diversity (female
directors). Also interpret results to find relationship between board size (BS) and Firm
performance (ROA, EPS).
Keywords: Female Directors, Firm Performance, Board Size, Corporate Governance.
3. 3
Introduction
During last ten to twenty years issues of gender diversity (Female board members) and
board size has been focused in organizations and is increasing on daily basis. Some countries
have formulated regulations for maintaining a level of female board members in firms. Even in
2005 Government of Norway has passed a regulation which describes that large firms should
maintain 40 percent female board members in total board members. In Europe more than 60
percent of top companies have a minimum of one female board director. In this research paper
we will study “If there is any relation between number of female directors, board size and
performance of firms”.
There is a remarkable study on this particular topic because in current scenario this is an
attraction for researchers. Here we will discuss about what advancements are made on this topic
till now. Latif, Shahid, Zia ul haq, Waqas & Arbab (2013) have said that board size has a
significant impact on firm’s performance while board composition has insignificant impact on
firm’s performance. Dang, Nguyen & Chi Vo (2012) studied comparatively on women on
corporate boards and firm performance. They did not find any significant relation between
gender diversity (female directors) and firm performance. Here it should be noted that they used
time series data. Erhardt et al (2003) and Carter et al (2003) resulted positive relation between
female directors and firm performance. While Shrader et al (1997) has not resulted any relation
in gender diversity and firm performance.
4. 4
Abdullah et al (2013), Bathula (2008) has also created significant and positive relation
between females on board and firm’s performance. Result positivity and negativity varies from
authors to authors and sector to sector. There can be differences in national, cultural and
geographical factors.
The study sector of our research is Textile sector in Pakistan. Pakistan is agricultural
country. Almost 60 percent of its population depends directly or indirectly on agriculture. Cotton
is produced at high level and it is major raw material for the textile industry of Pakistan. Textile
sector is as old as Pakistan and there were 3000 looms and 78000 spindles at time of
independence. Economic survey of 2008 described that there are 440 units, 8.4 million spindles
and 143 textile units are operating in this country. Textile industry is contributing 65 percent of
total foreign exchange earnings. Exports contribution of Pakistan is 1 percent of total world
exports. The reason for poor performance of Pakistan is usage obsolete technology, machinery
and absence of code of corporate governance.
Data and Methodology
Data
The sample consists of balanced panel. We have selected eleven (11) textile mills in
Pakistan for our research. Data of each company is from 2008 to 2012. All textile mills are listed
in Karachi Stock Exchange, which is the biggest stock market in Pakistan. A big care was taken
in collection of this data because most of the data from data source was manipulated. The biggest
source of data collection is annual reports of selected textile mills. Some of the data was
5. 5
excluded because the results were not as good as we wanted to prove our model. Data of a textile
mill was excluded because we did not find its data of year 2012. So, that the total sample of our
research paper is Fifty five (55). We used a total of 5 variables two of them were independent
variables, two were dependent variables and one of them is control variable. The variables are
Female Directors, Board Size, Firm Size, Earning per Share and Return on Equity. Source of
public internet is only used and each data entry is made after very careful calculations. We find
that the firms which are medium in size and having firm size of 16-17(natural log) were more
profitable than other firms.
Method
Our data interpret that in textile mills of Pakistan number of female directors are
decreased by almost eleven percent (11%) in 2012 as compared to 2008 which shows
dissatisfaction of these firms about appointment of female directors. While board size of these
firms are decreased 1.16% in 2012 as compared to 2008. The figure of 1.16% is small but it
could be increased or decreased in any future time period.
We used OLS Regressions to interpret our results. Return on Assets (ROA) and Earning per
Share (EPS) are the dependent variables, while Board Size (BS) and Female Directors (FD) are
the independent variables in our study. For data entry Microsoft Excel is used and then we used
EViews for data and model interpretation and finding favorable results.
Description Of Variables
6. 6
There are five (5) variables which are used to express the results on “Impact of Female Directors
and Board Size at Firm’s Performance in Pakistan’s Textile Industry”. All variables are
described as following:
Female Directors (FD)
It means the number of female directors in a firm’s board of directors. Data of eleven
(11) firms for five (5) years each as used for data entry. Number of total female directors is
pasted in analysis. The maximum number of female directors in the data is four (4) and
minimum is zero (0). It is so because in Pakistan there was no interest shown for making a
female director in past but now things are going to be changed. It is an independent variable.
Board Size (BS)
It refers to the total number of board of directors in a firm. It is an independent variable
of our study. Latif et al. (2013) said that board size has a significant impact on firm’s
performance. The average number of board of directors in Pakistan oriented textile firms is seven
(7). While maximum number is ten (10) and minimum number of board of directors is seven (7).
Firm Size (FS)
Raithatha & Bapat (2012) has described in their research paper that firm size (FS) has
insignificant impact on corporate governance(board size, female directors etc). This variable is
placed as a control variable in this study. Firm size is extracted by calculating Natural logarithm
of firm’s total assets.
Firm Size (FS) = Ln (Total Assets)
7. 7
For example,
If a firm’s total assets are of Rs-2,312,432 then the calculation will be as under:
FS = Ln (23,12,432)
FS = 14.6538
Return on Assets (ROA)
Singh and Davidson (2003), Eisenberg et al. (1998) has described that there is a significant
negative relation in board size and firm performance. Under light of this recommendation, Latif
et al. (2013) said that ROA is no affected by Board Size.
Return on Asset is a dependent variable which measures firm performance. ROA is calculated by
dividing “Net Income” with “Total Assets”. We can calculate it using following equation:
Return on Assets (ROA) = Net Income/Total Assets X 100
If a firm’s Net Income is 42’654 and Total Assets is 5,67,343 then Return on Assets will be:
Return on Assets (ROA) = 42,654/5,67,343 X 100
= 7.51 Percent
Earnings per Share (EPS)
EPS is aggregate earning of a firm on each of its share. It is important for company and its
investor. Because company attracts its investors by exposing it’s earning per share and investor
puts his investment in a company by analyzing the earnings of a company. Earnings per Share
can be calculated by following formula:
8. 8
Earnings per Share (EPS) = Net Income – Dividend Paid on Preferred shares
Literature Review
Carter, Simkins & Simpson (2003) has presented a strong opinion on the topic. Duality of
CEO and board chair, number of annual board meetings, age of directors, size, number of
directors, percentage of insiders, number of women directors, percentage of women, percentage
of minorities on board, number of minority directors were the key variables of this paper. They
concluded after controlling for industry, size, and other corporate governance measures, they
find positive relation between presence of women and minority on board and firm value.
Abdullah et al (2013), Bathula (2008) has also created significant and positive relation between
females on board and firm’s performance. Result positivity and negativity varies from authors to
authors and sector to sector. There can be differences in national, cultural and geographical
factors.
Smith et al. (2005) has highlighted board diversity and firm value’s relationship is dependent on
selection of variables that express performance of a company or firm. However, Adams &
Ferreira in 2004 made a conclusion of their study that presence of female directors a positive
effect on Return on equity (ROE). While, gender diversity has a negative impact at return on
assets (ROA). Lückerath-Rovers (2012), Adams & Ferreira (2009), Ararat et al.(2010) and
Erhart et al. (2003) these all researchers has proved a positive relation in performance(measured
by ROA, ROI and ROE) and board gender diversity. However, Francoeur et al. (2007), Darmadi
(2011) and Minguez Vera et al. (2010) found a significant negative relation in board gender
diversity and performance of a firm.
9. 9
Carter et al. (2002) also studied at this topic and found results that a positive relation lays
between woman director percentage and company’s performance. Gulam hussen & Santa
(2010)has studied with this topic and a huge sample 461 commercial banks of different countries
and different geographical sectors and made a conclusion that bigger the boards of directors
smaller will be the firm’s performance and also these firms have a low level of asset quality as
compared to the firms which have smaller number of directors on board.
Latif et al (2013) have said that board size has a significant impact on firm’s performance while
board composition has insignificant impact on firm’s performance. Now the question arises is
that why different authors have resulted opposite and reverse conclusions from each other
researcher. Answer is might be that every region and country of world has its own tradition,
culture, geographical exposure, norms, values, policies, regulatory authorities, and needs. It is
not compulsory that every area of world represents one type of phenomena.
Schwizer et al. (2011) has studied at the topic of our interest in 2011. They used variables of
Independent female directors, female directors, female audit committee members, size of firm,
risk faced by the firm, return on assets, return on equity, leverage and price earnings ratio.
At this stage of our research we came to argue about some questions which our research will
answer are as following:
Q.1. What is relation between firm performance and board gender diversity?
Q.2. What is relation between board size and firm’s performance?
Q.3. What is the impact of firm size on firm’s performance?
Q.4. Is ROA and EPS really represent firm’s performance?
10. 10
Results and Interpretation
Here we will discuss our key variables which are dividing in two fundamental heads:
1. Independent Variables.
2. Dependent Variables.
Independent Variables
Those variables which are not dependent on other factors but other variables are influenced by
this type of variables. In our research independent variables are as follows:
Board Size (BS), Female Directors (FD).
Dependent Variables
It is a type of variable which are affected by other factors and independent variables. In our study
these are as following:
Return on Asset (ROA), Earning per Share (EPS).
Descriptive Statistics.
Here is Table 1 which describes descriptive statistics of independent variables.
Table 1. Descriptive Statistics (Independent Variable).
Board Size(BS) Firm Size(FS) Female Directors(FD)
Mean 7.709 16.20 0.781
Median 7.000 16.19 0.000
11. 11
Descriptive statistics is very important in order to check the data and its healthiness. The
descriptive statistics of our data is good in health. This is so because from data collection to entry
each step is taken carefully. The minimum values of Board Size (BS), Firm Size (FS) and
Female Directors (FD) are 7, 11.8 and 0 respectively and maximum values are 10, 22.73 and 4
respectively. Standard deviation of BS is 0.875, FS is 2.494 and FD is 1.227. Thus the
descriptive statistics shows that data gathered is reliable and valid. Reliability and validity is
thing which a researcher and readers wanted to have in the research paper. Table 2 presents
descriptive statistics of dependent variables.
Table 2. Descriptive Statistics (Dependent Variables).
The descriptive statistics of dependent variables is also showing good results. Mean of ROA is
3.733 and EPS is 21.81. Median of ROA is 3.139 and EPS is 6.230, Std. dev. for ROA is 7.676
and EPS is 47.69.
Std. Dev. 0.875 2.494 1.227
Jarque-Bera 8.053 18.63 30.86
Maximum 10.00 22.73 4.000
Minimum 7.00 11.80 0.000
Return on Assets(ROA) Earnings per Share(EPS)
Mean 3.733 21.81
Median 3.139 6.230
Std. Dev. 7.676 47.69
Jarque-Bera 4.135 737.2
Maximum 22.74 287.7
Minimum -16.78 -32.84
12. 12
Correlations.
Table 3. Correlations between independent variables.
BS FD FS
BS 1
FD -0.284294 1
FS -0.242081 -0.342846 1
This table shows correlations between all the independent variables we used in regression model.
Correlations of independent variables are found because it shows the relationship of independent
variables and tells the direction of research either it is positive or negative. As the results are
shown in table, it can be said that independent variables have a negative correlation between
each other. The variables among which correlation is being discussed are Female directors (FD),
Board size (BS) and Firm size (FS). Here it should be noted that Firm Size (FS) is a control
variable which is added in variables to express our regression model more effectively.
Regressions.
Table 4. RegressionTable.
EPS ROA
Variables T-Statistics Coefficient Probability T-Statistics Coefficient Probability
FD
FS
BS
-5.924190
1.435630
-0.177465
-3.048443
5.516008
-0.618833
0.0000
0.1587
0.8600
-6.606944
0.649068
-0.044956
-2.725019
1.419392
-0.053138
0.0000
0.5199
0.9644
R-Squared
F-Statistics
0.603489
4.800153
0.696536
7.238979
13. 13
Note: The total sample of this research is 55 and cross-section is 11. (n = 55)
*** Significance of 0.01
** Significance of 0.05
* Significance of 0.10
Table 4 provides statistical evidence of fitness of model. If we discuss relation of Earning per
share (EPS) with our independent variables it shows R-squared of 0.603489 and F-statistics of
4.800153. F-statistics is a measure which describes overall fitness of model. Its minimum value
should be 3.84 and F-statistics value of our model is more than this so that our model is
considered as fit. R-squared value of our model is more than 60 percent, which means that the
model is effectively describing our variables.
The relation of Return on Assets (ROA) with independent variables is healthy also and shows
R-squared of 0.696536 which means that model is explaining the variables effectively and F-
statistics is 7.238979 that show that model we have used if fit. Here is the regression equation:
Firm Performance (FP) = α + β FD + β BS + β FS + β ROA + β EPS + ε
This regression model is OLS Regression and is explaining all the variables in light of Firm
Performance (FP). In order to differentiate results of both dependent variables (return on assets
and earnings per share) we can split regression equation into two regression equations. Those
equations are as under:
Return on Asset (ROA) = α + β FD + β BS + β FS + ε
Earnings Per Share (EPS) = α + β FD + β BS + β FS + ε
14. 14
As the model describes that there are two dependent variables which are used to measure firm
performance. These variables are now effecting separately on independent variables.
Hypotheses
There are two hypotheses found in our study and advancements made by previous researchers
that,
H1: There is a significant negative relation between firm’s performance and Female Directors
(FD).
H2: There is insignificant relation between Board Size and Firm’s performance.
H1: There is a significant negative relation between firm’s performance and Female Directors
(FD).
After meaningful discussion and careful study it is found that female directors have a negative
relation with firm performance. As research concluded by Francoeur et al. (2007), Darmadi
(2011) and Minguez Vera et al. (2010)and some other authors which found a significant negative
relation in board gender diversity(Female Directors FD) and performance of a firm. A very
comprehensive research was made by Adams & Ferreira in 2009 they also found a negative and
significant relation between Female Directors (FD) and performance of a firm(ROA).
H2: There is not any significant relation between Board Size and Firm’s performance.
In the study we have found an insignificant relation between Board Size (BS) and firm
performance. We did not find any relationship in BS and Firm Performance. Latif et al. (2013)
15. 15
said that board size has a significant impact on firm’s performance but the sector they chose was
sugar mill sector and our sector was textile sector in Pakistan, Lipton & Lorsch (1992), Jensen
(1993) and Tornyeva & Wereko (2012) all of them has created a negative relation between
Board Size and Firm Performance.
Conclusion
In research paper there are different heads under them discussion has been made. Board Size
(BS) and Female Directors (FD) are independent variables. Return on Assets (ROA) and Earning
per Share (EPS) are dependent variables which are used to measure the performance of the firm.
Performance of company means the financial performance of that particular firm which includes
different ratios and method to measure. So, that we have added ROA and EPS as the dependent
variables which are measuring the performance of the firm or company. One control variable is
also included which is Firm Size (FS). We obtained data of eleven (11) listed textile mills in
Pakistan. Data of each company is gathered for five (5) years so, that the sample size was fifty
five (55). We have constituted two hypotheses. First says that, “there is a significant and negative
relation between the gender diversity (female directors FD) and firm’s financial performance.”
while, second hypothesis elaborates that, there is not any significant relation between firm’s
performance(FP) and board size(BS).The reason for this is that there is no positive or negative
change in our results in change of each of them on each other. So, both of these (BS and FP)
have zero influence on each other. While the female directors (FD) and firm’s performance
(ROA, EPS) are negatively correlated with each other. Simply there is a significant negative
relation between firm performance and female directors. In this study we studied all the
dependent and independent variables carefully in order to find relationship between female
16. 16
directors and board size with firm performance. OLS Regressions was used to interpret and make
a result of the given data. So, we found no significant relation between Board Size (BS) and Firm
Performance (ROA, EPS), while there is a negative and significant relation between Firm
performance and Female Directors.
17. 17
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