Barriers of Good Corporate Governance Practices: Evidence from Emerging Economy


  • Yin Liu Peking University, China



Institutional; EFA; Corporate Governance; Social Barriers, Agency Theory


Corporate governance (CG) is often split among rule and principle-based methods to regulation in distinctive institutional contexts. CG practices are divergent among countries due to differences in their institutional environments. Therefore, the purpose of this study is to identify the barriers of CG practices and compliance in Pakistan. The primary data is collected from 105 Pakistan Stock Exchange (PSX) listed firms through survey questionnaire. The study employed the exploratory factor analysis (EFA) to identify the barriers of good CG practices and compliance in Pakistan.

Using exploratory factor analysis (EFA), this study identified five major barriers, i.e. firm level barriers (lack of auditor independence, board ineffectiveness, lack of shareholders’ awareness), external barriers (political and governmental interference in business activities, weak legal control and enforcement, high levels of corruption), social barriers (strong social ties among different stakeholders, interpersonal connections among boards of directors (BoDs), education and training barriers (lack of professional education and training among stakeholders) and legal barriers (fewer voting rights) which restrain good CG practices in Pakistan.

The study contributes to existing CG literature and highlights the barriers which hinder the good CG practices and compliance, especially in the context of Pakistan. The findings are applicable to other emerging markets especially in Asian countries due to similar socio-economic environment.




How to Cite

Liu, Y. (2022). Barriers of Good Corporate Governance Practices: Evidence from Emerging Economy. International Journal of Business and Management (IJBM), 1(1), 87–108.