ABSTRACT

This study aims to investigate the effect of corporate governance mechanisms (i.e., board composition, insider ownership, block holder ownership, and audit quality) on free cash flow (FCF) through the dividend policy of the firms listed on the Pakistan Stock Exchange (PSX). The sample of non-financial firms was taken from the KSE-100 index from 2008 to 2017. The mediation technique developed in 1986 by Baron and Kenny is used. The results revealed that CG mechanisms help to minimize the agency problem of free cash flow. Strong governance attributes results in higher dividend payment. This study concludes that a high dividend payout has a negative effect on FCF. Overall, this study confirms the full mediating effects of dividend payout on the relationship between board independence and FCF, insider ownership and FCF, audit quality and FCF, and partial mediation of dividend payout on the link between board meetings and FCF. The results suggest that firms should build and execute their policies relating to corporate governance to manage their resources efficiently; this can help reduce FCF and minimize agency problems.

摘要

本研究旨在通过巴基斯坦证券交易所 (PSX) 上市公司的股息政策，调查公司治理机制（即董事会组成、内部人持股、大股东持股和审计质量）对自由现金流 (FCF) 的影响). 非金融公司的样本取自 2008 年至 2017 年的 KSE-100 指数。使用了 Baron 和 Kenny 于 1986 年开发的中介技术。结果表明，公司治理机制有助于最大限度地减少自由现金流的代理问题。强大的治理属性导致更高的股息支付。这项研究的结论是，高股息支付对 FCF 有负面影响。总的来说，这项研究证实了股息支付对董事会独立性和 FCF、内部人所有权和 FCF、审计质量和 FCF 之间关系的完全中介作用，部分调节董事会会议和 FCF 之间的联系的股息支付。结果表明，公司应制定和执行与公司治理相关的政策，以有效管理其资源；这有助于减少 FCF 并最大限度地减少代理问题。