Leverage, corporate governance, and export intensity of heterogeneous firms: micro-level evidence for Pakistan

ABSTRACT

This study attempts to analyse the impact of leverage and corporate governance on export intensity of manufacturing firms quoted on Pakistan stock exchange for period 2013–2019. The results of a two-step system GMM method show that leverage has a negative relationship to export intensity. We find evidence that a firm’s age negatively impacts the export sales to total sales ratio, while profitability has a positive connection with it. Finally, we note that board size exhibits a negative relationship with export intensity. These findings suggest important policy implications for export promotion, specifically for a small-open economy.

JEL CLASSIFICATION:

• Leverage
• corporate governance
• heterogeneous firms
• export intensity

JEL CODES:

• F23
• G32
• G38

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

¹ PSX database provides the audited financial statements which comprises profit and loss information, balance sheet data, cash-flow statement, and their footnote details including corporate governance and export sales information. We also use the EMIS database for collecting the financial information, for instance sales and total assets.

² For brevity purpose, we do not report the results of robustness checks and can be provided on request. Our results remain consistent under different specifications.