This study aims to find the influence of corporate governance on firm performance for the listed non-financial firms on the Pakistan Stock Exchange (PSX) for the period 2005-15. The article has measured corporate governance by the large boards with more independent directors, independence of audit committee, ownership concentration, non-existence ofCEOduality, and presence of foreign and institutional investors. To address this endogenous nature of institutional ownership and performance in this study we have used instrumental variables (IV) techniques using a two-stage least square (2SLS) by instrumentalizing institutional ownership with firm size and firm age. The study found that firms with large and independent boards outperform their counterparts. Similarly, the study found that firms having the joint position ofCEOand chairperson performs lower than counterparts. In Pakistan firms with foreign and institutional owners better than others. We found that firms with concentrated owners have a lower level of agency problem and ultimately perform well. Furthermore, we found that firms with a lower level of agency problem type II (measured via ownership concentration contestability) perform better in Pakistan.

The study analyzes the impact of ownership structure on dividend smoothing via the lens of agency and information asymmetry theory. The study also investigates the impact of ownership on dividend smoothing in the unexamined asymmetric context Dividend smoothing is measured via speed of adjustment and relative volatility. The study documents that higher individual, management, and institutional ownerships are positively associated with increased dividend smoothing. Consistent with the rental hypothesis in foreign-owned firms smooth less also concentrated firms bear with cuts and omissions. Foreign ownership has the opposite impact on dividend smoothing in adjusting dividends from below and above i.e., always prefer high dividends. Individual ownership has also exhibited a different impact in smoothing from below and above. Institutional owners avoid cuts and omissions and negatively affect SOA (smooth more) in case of adjusting dividends from above. Ownership concentration is negatively associated with dividend smoothing irrespective of whether the firm is smoothing from above or below. In contrast, management ownership negatively affected SOA in adjusting from above or below. Family firms in Pakistan smooth more to win minor shareholders' trust and signal that they sacrifice their private benefits to reduce the type II agency problem. Finally, the authors found a negative association between dividend smoothing and corporate governance quality. Over all the findings of the current study provides insight to the investors and regulators by offering dividend smoothing as an alternative monitoring mechanism to corporate governance.

Corruption is a curse in Pakistan, neither public office nor any structure immune from this phenomenon. Inspired by this, the study commits to examine two significant research issues. First the study assesses to find whether corruption greases the wheel or sanding it. Second, the study commits to determine what causes corruption in firms. This study is based on the World Bank's enterprise survey, data of Pakistani firms. This study tries to associate the effects of corruption on firm performance after controlling for firm specific factors. We check two sets of variables; first set is the variables that cover firm specific characteristics and other is variable that cover intervention with government agencies. The overall conclusion depicts a mixed approach on corruption effects. Our evidence shows that there is a negative association of corruption on firm performance which supports that the hypothesis of 'sand the wheels' is widely applicable in Pakistan. The results conclude that younger firms, directly exporting firms, large size firms are more likely to experience a deteriorating effect on their performance. Our study interestingly shows that bureaucratic complexities faced by the firms increases the performance of the firms which supports 'Grease the wheels'. Study finds that firms struggling in terms of sales growth, younger firms, firms in growing competition, large firms are more likely to pay bribes.

Purpose: Corporate innovation is a decisive driver of long-term business success. However, firms in emerging markets often struggle with weak governance structures and inefficient decision-making, which can impede their innovation potential. Governance mechanisms, particularly the role of the board of directors, play an important role in shaping corporate innovation strategies. Design/methodology/approach: This study explores the dynamic relationship between the board of directors' characteristics and innovations. Corporate innovation is measured by R&D intensity and patent counts. This study uses hand-collected data from 2010 to 2018 of textile sector's listed firms on the Pakistan Stock Exchange (PSX). Findings: The result reveals that frequent board meetings positively influence R&D intensity and patent counts. An inverted U-shaped relationship between board size and innovation suggests that optimal board composition is important for innovation. Furthermore, CEO duality significantly enhances innovation in the textile section, while the presence of foreign directors promotes creativity. Practical implications: The finding offers valuable suggestions for policymakers and corporate leadership in emerging markets. Firms should optimize board structure, encourage foreign directors' participation and leverage CEO leadership dynamics to drive innovation. Originality/value: This study provides novel evidence on how board characteristics influence corporate innovation in Pakistan's textile sector. Using hand-collected data from 2010–2018, it measures innovation through both R&D intensity and patent counts. The study further identifies an inverted U-shaped relationship between board size and innovation and highlights the roles of board meetings, CEO duality and foreign directors in promoting innovation in an emerging-market context.