Abubakr Saeed

Financial constraints, bank concentration and SMEs: evidence from Pakistan

Purpose - – This paper aims to empirically investigate the impact of bank market concentration of financial constraints on firm investment. Design/methodology/approach - – This analysis is based on cross-industries panel of 368 listed Pakistani non-financial firms over the period of 2001-2009. Further, the Generalized Method of Moments estimation technique has been used to estimate the dynamic panel data model. Findings - – By applying a dynamic panel analysis, it was found that small- and medium-sized enterprises (SMEs) are financially constrained in the credit market. The main finding indicates that reduction in bank concentration eases financing constraints, and this effect is more pronounced for SMEs. In addition, while testing the firm opacity in this context, results reveal that opaque firms are more financially constrained, and bank market competition is less favourable to the firms with greater opacity. Originality/value - – The results, first, assess the efficacy of ongoing financial reforms in Pakistan and, second, offer implications for other economies that exhibit financial development similar to that of Pakistan.

Theoretical motives of corporate cash holdings and political connections: firms level evidence from a developing economy

In this paper, we revisit the theoretical motives of corporate cash holdings while concentrating on the effect of political connections. In particular, we postulate two competing hypotheses for the effects that political connections can have on cash holdings: ‘substitution effect hypothesis’ and ‘complementary effect hypothesis’. Using the data on Pakistani firms over the period 2002–2010, we find that connected firms hold significantly larger cash reserves than their non-connected counterparts, thus confirming the ‘complementary hypothesis’, which suggests that agency problems lead connected firms to accumulate large amount of cash. Further, this effect is found to be more pronounced in dictatorial as opposed to democratic regimes indicating the presence of higher degrees of political patronage in that period. Finally, we also find differences in the complementary effect based on firm characteristics. Our results suggest that the firm size and leverage have increasing effects on the cash holdings of connected firms, contrary to the mainstream literature standpoint.

The impact of transportation infrastructure on economic growth: empirical evidence from Pakistan

The direct and indirect effects of transportation infrastructure have a positive impact on the economic growth and development of a country. Apart from improving accessibility, infrastructure development brings along trade and investment opportunities to the previously unconnected regions. It also provides access to goods, services, and employment opportunities in these regions through the multiplier effect. In this paper, a panel of data is employed using the unit root, cointegration, and Granger Causality (GC) model to test whether causal linkages between economic growth and transportation infrastructure exist at national and provincial level. The findings suggest that in the short run, there is no causality between the two variables at the national level, however, a unidirectional causality from economic development to infrastructure investment exists in the long run. At the provincial level, bidirectional causality in the rich and much developed provinces exists, whereas a unidirectional GC exists from economic growth to transportation infrastructure in the underdeveloped provinces. The outcomes of the model shed light on the fact that infrastructure investment per se is not sufficient to boost the economic activity in the underdeveloped regions of Pakistan. A cointegrated investment package is needed, targeting not only infrastructure but also the social and technological development, which can help these regions to realize the promotion of economic growth in the long run.

Do Political Connections Affect Firm Performance? Evidence from a Developing Country

ABSTRACT We investigate how politicians serving on the boards of directors influence firm performance. The results show a negative relationship between political connections and firm performance. Specifically, politically connected firms underperform nonconnected firms directors by almost 17 percent and 15 percent based on return on assets and return on equity, respectively. By stratifying the sample duration into two periods based on the political environment, we find that this effect is more pronounced in autocratic as opposed to democratic regimes. Finally, our results also suggest that the performance of connected firms with more growth opportunities is not affected by political connections.

Family and state ownership, internationalization and corporate board-gender diversity: Evidence from China and India

Purpose In times of vivid debates on the inclusion of women on boards, the purpose of this paper is to shed a new light on the composition of boardrooms in emerging market firms by investigating how family and state ownership affect board-gender diversity in the emerging economies. Design/methodology/approach This study uses Tobit regression to examine the effect of firm ownership on board-gender diversity. A panel data set of Chinese and Indian firms for the period 2004-2013 is used to conduct this study. Findings The results show a negative and significant impact of family and state ownership on the proportion of women directors. However, this relationship is seen to be reverse if the firm is operating in international markets. Notably, a negative relationship was seen to persist between ownership structure and board-gender diversity for both female executive and independent board members, whereas a positive impact of internationalization was observed only for independent female directors. Originality/value This research addresses the board-gender diversity issue in emerging economies by focusing on firm characteristics which are unique to their business context. Further, this study identifies the conditions under which emerging market firms assimilate or proscribe women on their boards by recognizing the salient features of firms from emerging markets. Hence, in doing so, new evidence is added to the studies on the determinants of board-gender diversity. Lastly, it advances the earlier literature based on resource dependency and agency views and demonstrates the importance of internationalization for the inclusion of women on corporate boards.

Business Groups and Financial Constraints: Evidence from Pakistani Group Affiliated Firms

We test whether group affiliation reduces the financial constraints for the affiliated firms in Pakistan. Results reveal that group affiliated firms are not financially constrained. Further, we find evidence for an internal capital market in business groups that reduces the financing constraints of the affiliated firms. Surprisingly, positive effect of business affiliation is limited only to firms affiliated to twenty largest business groups.

“I Can't Go Out”: Mobility Obstacles to Women's Access to HIV Treatment in KPK, Pakistan

&NA; We examined the role of outside mobility constraints as barriers to HIV treatment for Pakistani women living with HIV (WLWH) whose husbands were permanently living in other cities. We focused on Khyber Pakhtunkhwa (KPK), which adheres to conservative social and cultural values for female mobility. Open‐ended interviews were conducted with 21 WLWH. We found that womens mobility outside the home was shaped by the system of parda (seclusion) and that a husbands lack of support by not being present for clinical appointments, distance to the HIV clinic, and ages of children emerged as crucial contributors to womens outside mobility and their subsequent abilities to access HIV care. These obstacles were more acute for women living with in‐laws rather than in nuclear families. Policymakers need to better understand the nuances of local cultures in which women seek HIV treatment so that they can devise practical, culturally appropriate, and acceptable programs.

It’s Complicated: Sociocultural factors and the Disclosure Decision of Transgender Individuals in Pakistan

ABSTRACT The literature on the disclosure decision of transsexual individuals is sparse, and that which does exist either uses empirical quantitative methods or aggregates transsexuals with other non-heterosexual individuals. The current study focuses this underresearched group and examines the disclosure decision of transsexual people in Pakistan, a developing Muslim country with a unique amalgam of social, cultural, and religious ground realities. Drawing on thematic analysis technique using in-depth interviews with 16 transsexuals, we show how sociocultural factors that are inherently embedded in the environment influence the disclosure decision in work and non-work settings. In particular, our respondents illustrate that their disclosure decision, which ranges from total disclosure on one end to nondisclosure on the other end, is influenced by the complexities of family honor, tightly integrated family network, social obligation to get married, and prevalent religious beliefs in the society. This study advances understanding of identity and disclosure decision of transsexual individuals by explicating the ways in which sociocultural factors are intricate part of their decision of coming out.

Women directors’ propensity towards risk in technology firms

Purpose This study aims to investigate the impact of the presence of women directors on firm’s risk-taking behavior in industries where innovation is pivotal and how this impact varies across ownership structure. Design/methodology/approach A sample of 71 listed technology firms on the National Stock Exchange of India for the period of 2008 to 2013 was used. Generalized method of moment estimation technique was used for data analysis. Findings Results reveal a positive impact of the presence of women directors on technology firms’ risk-taking behavior measured in terms of R&D spending, which is in contrast to the traditional notion that women are risk-averse. Further, results also reveal that family ownership negatively affects the impact of the presence of women directors on risk taking in technology firms. Practical implications The findings of the study suggest that females are risk takers in the context of R&D-intensive technology firms, thus providing new insight for policymakers to formulate more effective board gender diversity policies. Originality/value Based on the integration of agency and behavioral theories, it is suggested that female executives may be risk-averse or risk-takers depending on contextual factors such as innovation and ownership, which drive the impact of the presence of women directors on firms’ risk-taking behavior.

Rethinking agency theory in developing countries: A case study of Pakistan

Abstract We investigate if agency theory effectively explains agency conflict in the context of a developing country namely, Pakistan. Utilising data from 26 semi-structured interviews, we found that in Pakistan, there is no variation in risk preferences of principals (minority shareholders) and agents (majority shareholders). We also found that remuneration packages and board independence are not effective tools for governing owner managers in Pakistan. Thus, policy makers must shift their focus from soft internal governance mechanisms of appropriate remuneration and board independence. We propose for a rigorous external audit function, and appointment of independent directors and external audit firms by regulator.