Article | Open Access | Published: 15 December 2016
Development Financing and Economic Governance: Analysis of the Liquidity Crisis and Circularity Debts in Pakistan
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Abstract:
This paper is based on the models derived by the researchers to explain the patterns of corporate governance, firms financial policies, and liquidity position. A deductive approach has been adopted to reconcile and examine the different models of corporate governance and firms financial policies. The study showed that corporate savings are a good predictor of the macro-level investment in a country. The magnitude of national investment will increase by improvement in corporate savings. The corporate savings indicate the expansion in business activities which may be an indicator of the trust and confidence of the private sector. On the other hand, it explains the financial health of the corporate sector, which may provide a significant portion of tax revenue to the government for developing projects in the public sector. The study has concluded that corporate governance is a significant variable in determining liquidity and circularity debts. In this way, corporate governance becomes a crucial determinant of national investment. The bad corporate governance may deteriorate the investment activities at the national level, which may damage the economy for the longer term. This study also indicates that capital structure and the patterns of ownership play important role in the determination of the corporate governance of an institution.
Keywords:
corporate governance, financial policies, liquidity position, macro-level investment
Publisher:
ILMA UNIVERSITY
Published:
15 December 2016
Issue:
Issue 2 : Volume 12
E-ISSN:
2409-6520
P-ISSN:
2414-8393
This is an open access article distributed under the terms of the Creative Commons Attribution CC BY 4.0 license, which permits any use, distribution, and reproduction of the work without further permission provided the original author(s) and source are credited.