Impact Of The Board Characteristics On Investmeefficiency: Mediating Role Offinancial Reporting Quality

Abstract

The current study aimed to evaluate the function of financial reporting quality (FRQ) as a moderator of the effects of board characteristics on investment efficiency. This study considered board independence, board meetings, and board size as the determinants of board characteristics. Fifty-six non-financial firms on the Pakistan stock exchange (PSX) were taken as the sample from 2011 to 2021.The generalized method of moment (GMM) was utilized to handle the endogeneity problems. According to this method, board independence, board size, and board[1] meetings statistically significantly impacted investment efficiency. Similarly, the results of the second section suggest that a board characteristic has a statistically significant positive impact on financial reporting quality. According to the mediation analysis's findings, FRQ is not found to be a mediator between board size and investment efficiency, but it is a significant mediator between board independence and investment efficiency and a partial mediator between board meetings and investment efficiency. The findings may be valuable to the Pakistani business community and investors, practitioners, administrators, and scholars who want to learn more about the quality of financial reporting and board characteristics procedures.