EXPLORING THE FIRM LEVEL TRANSPARENCY AND ITS IMPACT ON FIRM VALUE

Saira Bano; Muhammad Asif; Muhammad Aamir

Saira Bano MS Schola, Department of Management Sciences, COMSATS University, Abbottabad, Pakistan
Muhammad Asif Department of Management Sciences, COMSATS University, Abbottabad, Pakistan
Muhammad Aamir Department of Management Sciences, COMSATS University, Abbottabad, Pakistan

Keywords: Transparency, Firm Value, Corporate Governance, Firm and Country Level Transparency, Pakistan Stock Exchange

Abstract

Increased transparency encourages management to perform efficiently which leads to increase profitability of Firm. Firms in Pakistan are exposed to political risk but they are adopting strategies for the risk management and performing well. The objective of this study is to examine the relationship between firm level transparency and firm value of non-financial firms in Pakistan. Sixty registered firms in KSE 100 Index of Pakistan were considered for analysis for the period 2014-2018. The researchers had developed an index for measuring the firm’s transparency (disclosure). Regression analysis technique was used to find important relationships between the variables. The results showed higher firm level transparency leads to accelerate firm financial value. The results provide singifcnat information about the issues under study. On the other hand higher level of transparency on firm level decreases firm value in Pakistani market. While inverse relationship was thus found amid political risk, transparency and firm financial value. This study had unveiled fact that mostly Pakistani firms are undervalued, riskier and slow growing which disclose more to combat with negative assessments in market from participants.