Evidence from Pakistan Stock Exchange. Ahmed Hassan Kanju

88 Pages·2016·0.88 MB·English

by  Mian Hassan Kanju

Corporate Governance and Firm’s Exporting Decision: Evidence from
Pakistan Stock Exchange.

By

Ahmed Hassan Kanju
(MM 141042)

MASTER OF SCIENCE IN MANAGEMENT SCIENCES
(FINANCE)

FACULTY OF MANAGEMENT AND SOCIAL SCIENCES
CAPITAL UNIVERSITY OF SCIENCE AND TECHNOLOGY
ISLAMABAD
OCTOBER 2016
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Corporate Governance and Firm’s Exporting Decision: Evidence from
Pakistan Stock Exchange.

By

Ahmed Hassan Kanju
(MM 141042)

A research thesis submitted to the Department of Management sciences,
Capital University of Science and Technology, Islamabad
In partial fulfillment of the requirements for the degree of

MASTER OF SCIENCE IN MANAGEMENT SCIENCES
(FINANCE)

DEPARTMENT OF MANAGEMENT SCIENCES
CAPITAL UNIVERSITY OF SCIENCE & TECHNOLOGY
ISLAMABAD
OCTOBER 2016
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CAPITAL UNIVERSITY OF SCIENCE & TECHNOLOGY
ISLAMABAD

CERTIFICATE OF APPROVAL

Corporate Governance and Firm’s Exporting Decision: Evidence from
Pakistan Stock Exchange.

By
Ahmed Hassan Kanju
(MM 141042)
THESIS EXAMINING COMMITTEE
S No Examiner Name Organization
(a) External Examiner Dr. Muhammad Khalid Sohail COMSATS, Islamabad
(b) Internal Examiner Mr. Ahmad Fraz CUST, Islamabad
(c) Supervisor Mr. Shujahat Haider Hashmi CUST, Islamabad

________________________________
Mr. Shujahat Haider Hashmi
Thesis Supervisor
October 2016

______________________________ ___________________________
Dr. Sajid Bashir Dr. Arshad Hassan
Head Dean
Department of Management and Social Sciences Faculty of Management and Social Sciences
Dated : October 2016 Dated : October 2016

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Copyright © By Mr. Ahmed Hassan Kanju

All rights reserved. No part of material protected by this copyright notice may be replaced or
utilized in any form or by any means, electronic or mechanical, including photocopy, recording
or by any information storage and retrieval system without the permission from author.
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Certificate

This is to certify that Mr. Ahmed Hassan Kanju has incorporated all observations, suggestions
and comments made by the external evaluators as well as the internal examiners and thesis
supervisor. The title of his Thesis is: Corporate governance and Firm’s exporting decision:

Evidence from Pakistan Stock Exchange.

Forwarded for necessary action

Mr. Shujahat Haider Hashmi
(Thesis Supervisor)

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Dedication

Dedicated from core of my heart to my beloved parents Mr. & Mrs. Mian Shauket Javed Kanju
and my adorable and very supportive sisters.

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Table of Contents

Chapter 01 ....................................................................................................................................... 1
INTRODUCTION .......................................................................................................................... 1
1.1 Background of the study .................................................................................................. 1
1.2. Theoretical Background ................................................................................................... 7
1.2.1 Agency Theory.......................................................................................................... 7
1.3. Problem Statement ........................................................................................................... 8
1.4. Research Question ............................................................................................................ 9
1.5. Research Objective ........................................................................................................... 9
1.6. Significance of the Study ............................................................................................... 10
1.7. Organization of the Study .............................................................................................. 11
Chapter 02 ..................................................................................................................................... 12
LITERATURE REVIEW ............................................................................................................. 12
2.1 Brief Review of Literature ............................................................................................. 12
2.2 Hypothesis Development ............................................................................................... 33
2.3 Theoretical Framework .................................................................................................. 33
Chapter 03 ..................................................................................................................................... 35
DATA DESCRIPTION AND METHODOLOGY ....................................................................... 35
3.1 Sample and Data Source ................................................................................................ 35
3.2 Variables of Study and Measurement ............................................................................ 36
3.2.1 Dependent Variable ................................................................................................ 37
3.2.2 Independent Variables ............................................................................................ 37
3.2.3 Control Variables .................................................................................................... 39
3.3 Model Specification ....................................................................................................... 41
3.4 Panel Data Regression .................................................................................................... 43
3.5 Pooled Dummy Variables .............................................................................................. 45
3.4.6 Sector Analysis ........................................................................................................... 46
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Chapter 04 ..................................................................................................................................... 47
EMPIRICAL RESULTS AND DISCUSSION ............................................................................ 47
4.1 Empirical Results ........................................................................................................... 47
4.1.1 Descriptive Results ................................................................................................. 47
4.2 Multicollinearity Checks ............................................................................................ 52
4.3. Regression Analysis ................................................................................................... 55
4.1.4. Pooled Dummy Regression Analysis...................................................................... 61
4.2. Discussion of Results ..................................................................................................... 62
Chapter 05 ..................................................................................................................................... 64
CONCLUSION AND POLICY RECOMMENDATIONS ...................................................... 64
5.1 Conclusion .................................................................................................................. 64
5.2 Policy Recommendations ........................................................................................... 65
5.3 Limitations .................................................................................................................. 66
5.4 Future Research Directions ........................................................................................ 67
References: .................................................................................................................................... 68

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List of Tables

Table 1.1 Year Wise Exports ....................................................................................................... 05
Table 1.2 Sector Wise Exports...................................................................................................... 06
Table 3.1 Sample Classification ................................................................................................... 36
Table 3.2 Variable’s Description .................................................................................................. 42
Table 4.1: Descriptive Statistics ................................................................................................... 49
Table 4.2: Correlation Matrix ....................................................................................................... 53
Table 4.3: Variance Inflaton Factor .............................................................................................. 54
Table 4.4: Common Effect Model ................................................................................................ 55
Table 4.5: Likelihood Ratio Test .................................................................................................. 57
Table 4.6: Random Effect Model.................................................................................................. 57
Table 4.7: Hausman Test .............................................................................................................. 59
Table 4.8: Fixed Effect Model ...................................................................................................... 60

Table 4.9: Pooled Dummy Regression ......................................................................................... 61

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ACKNOWLEDGEMENTS

All the praises are for the Allah Almighty; the most beneficent and the most merciful;
who granted man with knowledge. All salutations are upon the Prophet (P.B.U.H.) whose
teachings enlighten my thought and thrive my ambitions.
I sincerely wish to express my profound gratitude and appreciation to my supervisor Mr.
Shujahat Haider Hashmi for his support in all research activities. Without his help my Mphill
thesis was next to impossible.
I am extremely grateful to my parents Mr. & Mrs Mian Shauket Javed Kanju and my
supportive sisters. My whole academic career till now would have not been possible without the
love and support of my family, who believed in me blindly and they kept me going and were the
force behind me.
I would also like to thanks my friends and class fellows who helped me a lot in academia
as well as in other disciplines of life.

Thanks to all of you !
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