Sensitivity of Firm Size Measures to Practices of Corporate Finance: Evidence from Sharīʿah Compliant Firms

Hashmi, Syed Danial and Gulzar, Saqib and Khan, Majid Jamal and Akhtar, Muhammad (2018) Sensitivity of Firm Size Measures to Practices of Corporate Finance: Evidence from Sharīʿah Compliant Firms. Journal of Islamic Business and Management (JIBM), 8 (2). ISSN 25212249

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Abstract

The aim of this study is to analyse the impact of different measures of firm size (total assets, total sales, market value of equity share and total number of employees) on six different practices of corporate finance, namely financial policy, investment policy, diversification, financial performance, corporate governance and dividend policy. Further, study examines the sensitivity of different measures of size towards these practices of corporate finance based on R2, sign and significance of beta co-efficient. Researchers used data from Sharīʿah compliant firms i.e. KMI-30 index (Karachi Meezan index of Sharīʿah compliant firms) for a period of 8 years i.e. 2010-2017. Using panel data analysis technique, the researchers found that in Sharīʿah compliant firms, different proxies of size are differently related with the practices of corporate finance. The results have serious implications for researchers as the study confirms the presence of “measurement effect” in “size effect”. Researchers thus need to be careful when selecting any proxy of firm size for their research using Sharīʿah compliant firms, keeping in mind the scope and context of their work.

Item Type:	Article
Subjects:	H Social Sciences > HG Finance
Divisions:	Faculty of Management Sciences (FMS) > Riphah School of Leadership Rawalpindi
Depositing User:	Mr. Syed Danial Hashmi
Date Deposited:	10 Mar 2020 17:52
Last Modified:	10 Mar 2020 17:52
URI:	http://research.riphah.edu.pk/id/eprint/267

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