Corporate Governance in Pakistan : Corporate Valuation, Ownership and Financing

In this study the relationship between corporate governance and corporate valuation, ownership structure and need of external financing for the Karachi Stock Market is examined for the period 2003 to 2008. To measure the firm- level governance a rating system is used to evaluate the stringency of a set of governance practices and cover various governance categories : such as board composition, ownership and shareholdings and transparency, disclosure and auditing. The sample consists of 60 non-financial firms listed on Karachi Stock Exchange and comprises more than 80 percent of market capitalization at Karachi Stock Market in 2007. The results confirms the theoretical notion that firms with better investment opportunities and larger in size adopt better corporate governance practice. The proposition that ownership concentration is a response to poor legal protection is also validated by the results. The more investment opportunities lead to more concentration of ownership and the ownership concentration is significantly diluted as the firm size expands. The findings are consistent with theoretical argument claiming that family owners, foreign owners and bring better governance and monitoring practices which is consistent with agency theory. The results suggest that firms which need more equity financing practice good governance. The results show that firms with high growth and large in size are in more need of external finance. The relationship between external financing and ownership concentration is negative. The results reveal that the firms which practice good governance, with concentrated ownership, need more external finance which have more profitable investment opportunities and are larger in size are valued higher. The interaction term of any variable with law enforcement term are not significant in any model suggesting that firm performance is not affected by rule of law in countries where legal environment is weak. These results adds an important link to the explanation of the consequences weak legal environment for external financing, corporate valuation and corporate governance. The results show that Corporate Governance Code 2002 potentially improves the governance and decision making process of firms listed at KSE.Ownership Concentration, Corporate governance, firm performance, External Financing, panel data

Relationship between Corporate Governance Indicators and Firm Value: A Case Study of Karachi Stock Exchange

We investigated whether differences in quality of firm-level corporate governance can explain the firm-level performance in a cross-section of companies listed at Karachi Stock Exchange. Therefore, we analysed the relationship between firm-level value as measured by Tobin’s Q and total Corporate Governance Index (CGI) and three sub-indices: Board, Shareholdings and Ownership, and Disclosures and Transparency for a sample of 50 firms. The results indicate that corporate governance does matter in Pakistan. However, not all elements of governance are important. The board composition and ownership and shareholdings enhance firm performance, whereas disclosure and transparency has no significant effect on firm performance. We point out that those adequate firm-level governance standards can not replace the solidity of the firm. The low production and bad management practices can not be covered with transparent disclosures and transparency standards.Corporate Governance; Firm Performance; Tobin’s Q; Agency Problem; Board Size; Shareholdings; Disclosures; Leverage Code of Corporate Governance

Ownership Concentration, Corporate Governance and Firm Performance: Evidence from Pakistan

The study investigates the determinants of ownership concentration, the effect of ownership concentration on the firm’s performance with the sample of sixty representativ e firms from different manufacturing sectors of the Pakistan’s economy during 2003 to 2008. The results suggest that firms where ownership is concentrated they do not adopt better governance practices and disclose less, however board composition has posit ive and significant role. The firm specific factors affect the concentration of ownership more, the more investment opportunities provides greater incentives for ownership concentration, however, size has opposite effect and leads to diverse ownership to get wider access to funds and share ownership. The results reveal that in Pakistan corporations have more concentration of ownership which is the response of weak legal environment. The concentration of ownership by top five block-holders seems to have positive effect on firms’ profitability and performance measures. The family, foreign and director ownership also has positive affect on firm performance, however firm performance is not effected by financial institutions’ ownership. The broad implication that emerges from this study is that ownership concentration is an endogenous response of poor legal protection of the investors and seems to have significant effect on firm performance. It requires implementation of corporate governance reforms at most at par with real sector and financial sector reforms.Ownership Concentration, Corporate Governance, Firm Performance, Panel Data

Corporate Governance in Pakistan: Corporate Valuation, Ownership and Financing

In this study the relationship between corporate governance and corporate valuation, ownership structure and need of external financing for the Karachi Stock Market is examined for the period 2003 to 2008. To measure the firmlevel governance a rating system is used to evaluate the stringency of a set of governance practices and cover various governance categories: such as board composition, ownership and shareholdings and transparency, disclosure and auditing. The sample consists of 60 non-financial firms listed on Karachi Stock Exchange and comprises more than 80 percent of market capitalization at Karachi Stock Market in 2007. The results confirms the theoretical notion that firms with better investment opportunities and larger in size adopt better corporate governance practice. The proposition that ownership concentration is a response to poor legal protection is also validated by the results. The more investment opportunities lead to more concentration of ownership and the ownership concentration is significantly diluted as the firm size expands. The findings are consistent with theoretical argument claiming that family owners, foreign owners and bring better governance and monitoring practices which is consistent with agency theory. The results suggest that firms which need more equity financing practice good governance. The results show that firms with high growth and large in size are in more need of external finance. The relationship between external financing and ownership concentration is negative. The results reveal that the firms which practice good governance, with concentrated ownership, need more external finance which have more profitable investment opportunities and are larger in size are valued higher. The interaction term of any variable with law enforcement term are not significant in any model suggesting that firm performance is not affected by rule of law in countries where legal environment is weak. These results adds an important link to the explanation of the consequences weak legal environment for external financing, corporate valuation and corporate governance. The results show that Corporate Governance Code 2002 potentially improves the governance and decision making process of firms listed at KSE.Ownership Concentration, Corporate Governance, Firm Performance, External Financing, Panel Data

The Relationship between Corporate Governance Indicators and Firm Value: A Case Study of Karachi Stock Exchange

We investigated whether differences in quality of firm-level corporate governance can explain the firm-level performance in a cross-section of companies listed at Karachi Stock Exchange. Therefore, we analysed the relationship between firm-level value as measured by Tobin’s Q and total Corporate Governance Index (CGI) and three sub-indices: Board, Shareholdings and Ownership, and Disclosures and Transparency for a sample of 50 firms. The results indicate that corporate governance does matter in Pakistan. However, not all elements of governance are important. The board composition and ownership and shareholdings enhance firm performance, whereas disclosure and transparency has no significant effect on firm performance. We point out that those adequate firm-level governance standards can not replace the solidity of the firm. The low production and bad management practicesCorporate Governance, Firm Performance, Tobin’s Q, Agency Problem, Board Size, Shareholdings, Disclosures, Leverage, Code of Corporate Governance

The Relationship between Corporate Governance Indicators and Firm Value : A Case Study of Karachi Stock Exchange

We investigated whether differences in quality of firm-level corporate governance can explain the firm-level performance in a cross-section of companies listed at Karachi Stock Exchange. Therefore, we analysed the relationship between firm-level value as measured by Tobins Q and total Corporate Governance Index (CGI) and three sub-indices : Board, Shareholdings and Ownership, and Disclosures and Transparency for a sample of 50 firms. The results indicate that corporate governance does matter in Pakistan. However, not all elements of governance are important. The board composition and ownership and shareholdings enhance firm performance, whereas disclosure and transparency has no significant effect on firm performance. We point out that those adequate firm-level governance standards can not replace the solidity of the firm. The low production and bad management practices can not be covered with transparent disclosures and transparency standards.Corporate governance, firm performance, Agency Problem, Board Size, Shareholdings, Disclosures, Leverage, Code of Corporate Governance

Causes, Effects, and Remedies in Conflict Management

While workplace conflicts have been widely studied in the literature, this researchprovides a holistic view of the causes and effects of such, and how managers or amanagement can resolve the conflicts among their teams and organization througha detailed, multidimensional framework carried out on one of the biggest textilefirms of Pakistan. With an initial sample of 145 respondents, 37 questionnaireswere dropped because of invalid and incomplete answers; therefore, the studywas carried out on 108 respondents. Conflicts are a part of human nature, butmanagement should play an important role in dealing with these issues, as therecan be enormous chances of conflicts due to a diverse workforce. Conflict alsoresults in poor work performance and low productivity; therefore, it’s suggestedto create teams or groups which may encourage a competitive culture in theorganization. Additionally, a few remedies are identified, which may resolve someissues; managers must look at those techniques for a better culture.&nbsp

The Refined Topological Vertex

We define a refined topological vertex which depends in addition on a parameter, which physically corresponds to extending the self-dual graviphoton field strength to a more general configuration. Using this refined topological vertex we compute, using geometric engineering, a two-parameter (equivariant) instanton expansion of gauge theories which reproduce the results of Nekrasov. The refined vertex is also expected to be related to Khovanov knot invariants.Comment: 70 Pages, 23 Figure

Topological and Entanglement Properties of Resonating Valence Bond wavefunctions

We examine in details the connections between topological and entanglement properties of short-range resonating valence bond (RVB) wave functions using Projected Entangled Pair States (PEPS) on kagome and square lattices on (quasi-)infinite cylinders with generalized boundary conditions (and perimeters with up to 20 lattice spacings). Making use of disconnected topological sectors in the space of dimer lattice coverings, we explicitly derive (orthogonal) "minimally entangled" PEPS RVB states. For the kagome lattice, we obtain, using the quantum Heisenberg antiferromagnet as a reference model, the finite size scaling of the energy separations between these states. In particular, we extract two separate (vanishing) energy scales corresponding (i) to insert a vison line between the two ends of the cylinder and (ii) to pull out and freeze a spin at either end. We also investigate the relations between bulk and boundary properties and show that, for a bipartition of the cylinder, the boundary Hamiltonian defined on the edge can be written as a product of a highly non-local projector with an emergent (local) su(2)-invariant one-dimensional (superfluid) t--J Hamiltonian, which arises due to the symmetry properties of the auxiliary spins at the edge. This multiplicative structure, a consequence of the disconnected topological sectors in the space of dimer lattice coverings, is characteristic of the topological nature of the states. For minimally entangled RVB states, it is shown that the entanglement spectrum, which reflects the properties of the edge modes, is a subset (half for kagome RVB) of the spectrum of the local Hamiltonian, providing e.g. a simple argument on the origin of the topological entanglement entropy S0=-ln 2 of Z2 spin liquids. We propose to use these features to probe topological phases in microscopic Hamiltonians and some results are compared to existing DMRG data.Comment: 15 pages, 19 figures. Large extension of the paper. Finite size scaling of the (topological) ground state energy splittings added (for the Kagome quantum antiferromagnet