Measuring the Validity of the Influential Factors for Good Corporate Governance

Abstract

This study was conducted and model was planned for measuring the validity of the self-developed instrument of influential factors for good corporate governance. The objective of this study was to measure the determinants (i.e. Agency Problem, Equity Return, Management Holdings and Transparent Audit) of the good corporate governance in Pakistan. The population of this study was professionals of Pakistani corporations and stock brokers of Islamabad Stock Exchange. The sample size was of 50 professionals and stock brokers. A self-developed questionnaire of five variables was constructed and factor analysis has been applied for measuring the validity of the instrument and its items. . Mean score of the items, factor relative importance and percentage of variances of the variables has also been measured. Factor loading of all 20 items has value greater than 0.4 and eigenvalues of every single variable is greater than 1.00 according to Kaiser’s criteria.