The Relation Between Financial Performance and Country Governance: A Review of Pakistani Firms

Abstract

The purpose of this research is to investigate the connection between governance at the country level and the financial performance of Pakistani firms from 2014 to 2023. This research contributes to the literature by using governance features at the country level instead of firm-specific aspects. In this paper, panel data was analysed using GMM. It may be concluded from Pakistan's empirical data that elements of country governance enhance the financial performance of companies doing business there. The findings of this research study have broad implications for businesses, present and potential local and foreign shareholders and investors, management, and governments. The present study's findings demonstrated that governance factors at the national level enhance Pakistani companies' financial performance. This information is also necessary for the local and global potential that stands to benefit from the macro factors. The study's findings help investors and shareholders decide whether to make investments in macroeconomic factors.