Board Characteristics and Its Impact on Investment Efficiency: Moderating Role of Free Cash Flow

https://doi.org/10.5281/zenodo.22040392

Abstract

The purpose of the study is to look into the characteristics of the board and how they affect investment efficiency and the moderating role of free cash flow. The sample size for this research was 75 non-financial firms listed in the Pakistan stock exchange over a period of 2012-2021. The data were collected from statistical model using panel least squares.  EVIEW has been utilized for data analysis. The findings of the demonstrate the presence of numerous combinations of characteristics as well as the significance of mutual impact that either increases or inhibits the influence of a particular variable, it can be concluded that various combinations of board characteristics (board directors, board size, ownership, and director qualification) lead to high firm performance.  The entirety of Pakistan's businesses and stockholders should take note of the findings of this study. This study examines how a company's capacity to make wise investment decisions is impacted both individually and collectively by the size, independence, and CEO duality of its board. By exploring particular qualities like these, these insights will be offered. In addition to offering useful implications for boards seeking to enhance their decision-making processes, the findings of this comprehensive study advance the theories now in use addressing corporate governance. Even if the study uses panel data, the cross-sectional structure of the dataset will still have an impact on the analysis. This might make it more difficult to spot long-term patterns and impacts in corporate governance and investment efficiency.