Corporate governance (CG) relates to various procedures and procedures to make the routine operations of firms succeed. It focuses on both micro and macro issues. At the micro level, the prime concern is to increase shareholders' wealth, while at the macro level it aims to contribute towards the national economy (Keaseyat et al.2005). From an economic perspective, it plays a significant part in enhancing efficiency for firms. Corporate governance mechanisms and practice enhance control of companyies' procedures and other activities to reduce the chance of fraud within the firm and increase the firm's value.

There is evidence that various aspects i.e. board size, managerial ownership, and audit quality have a close association with a firm's value. For example, Ararat et al. (2017) determined corporate governance through sub-indices like indices for board structure, disclosure of financial statements, ownership and shareholders rights and concluded that CG indicators are statistically important and positively effects the value of a firm. They also disclosed that among these sub-indices, the sub-indices for disclosure of financial statements are the principle ones to better predict a firm's profitability and a firm's value. The reason is a strong governancemechanism helps to better monitor routine business activities (Black et al. 2014).

Corporate governance issues of emerging economies are quite different from those of developed economies in various ways like ownership concentration and varying economic scenarios. For example, Braga-Ales and Morey, (2012) argued that as compared to developed economies, in emerging economies political risk is higher and hence firms are more vulnerable to corporate governance issues. This requires firms to pay more consideration towards corporate governance measures. Like other emerging economies, firms in Pakistan are exposed to poor corporate governance. This leads to weak shareholders' protection. Additionally, more political interference causes shareholders' trust to diminish and hence reduces overall investment. Hence, the core objectives are to investigate the proposed relations towards this end (CG& FV).

There are many studies which focus on the relationship between corporate governance mechanisms and value of the firm (Black et al. 2014, Black and Kim, 2012). These studies came up with varying results. For example, a study of Malaysian firms by (Zabri et al. 2016) discovered board size as important to the value of the firm, while board independence was found as insignificant. In another study of Pakistani firms, board independence was found to have a significant and positive relation with the value of the firm (Javeed et al.2007).Similar results were reported by Park and Jang (2010), whereas, Cui and Mak (2002) found a W shaped relationship between corporate governance and a firms' value:it declines at the start then increases tean falls down and at the end moves up.

There are also a few studies that predict no relation between corporate governance and a firm's value. For example, Gupta et al. (2009) examined the association between four dimensions of corporate governance and a firm's value. There are studies which suggest a positive association of the two subject variables (i.e. CG & FV) (Shukeri et al.2012); however, this association is a weak one. Contrary to this, some studies propose a significant relation between CG and FV. For instance, in a study of a corporate governance index of 0-100 for 526 Korean companies, it was noticed that an increase in governance index predicts strong governance which results in a major positive effect on the value of firm. A well-placed corporate governance mechanism directs and limits the authority and responsibility of top management and ensures the protection of the rights of minority shareholders and hence increases the firm's value.

In a study by Mansoor (2013) the association of CG and FV was examined. It was found that among various corporate governance indicators, three indicators were found to be more significant regarding the firm's value in the Pakistani market. Similarly, (Javeed, et al. 2007) concluded that other indicators of CG such as an independent board and ownership pattern were found to be significant and have a positive association with FV. The relationship between core attributes of corporate governance like ownership concentration, outside directors, board size and managerial ownership and firm's value was statistically found to be significant by examining non-financial firms in Pakistan. This study further revealed that ownership concentration has positive links to all measure of performance used in the study. Strong governance mechanisms improve the stock market performance within the country which maximizes shareholder value and encourages investors for investment (Parigi et al.2014). The positive association of effective corporate governance measures and equity return was presented by the study of Ibrahim et al. (2010) in non-financial sector firms.

This is a quantitative study and has used panel data. The population of the study are those firms which are non-financial and listed at Pakistan Stock Exchange (PSX). Through purposive sampling techniques, data from 100 firms for the period of 7 years form 2010-2016 are collected. Annual reports of each firm, data and State Bank of Pakistan, PSX are used as sources. Data were verified through various diagnostic tests to ensure their validity and normality.

This is measured through Tobin's Q (market value of equity divided by book value of equity).

This is measured as total no. of directors; directors may be executives (employees of the firm and also board members) and non-executive (board members from external) directors in the firm's board

This is measured through a dummy variable. It carries a value of (1) when the CEO also holds the office of the chairman of the firms and (0) in other cases.

This is a ratio of total no. of shares with managers to total outstanding shares

This is measured in terms of a dummy variable, value is 1 when financial statements were audited by top five well-known auditors who obey the disclosure rule of the SECP and 0 in other cases.

This is measured as the top five shareholders who hold an excess number of the firm's shares outstanding divided by total issued shares.

This is measured as the natural log of total assets/sale

This is the natural log of the total number of years from the time of listing on PSX.

Descriptive statistics will exhibit information regarding data used in the study. This information includes the mean or average of each variable separately followed by the minimum and maximum value of observation. Finally, the standard deviation of each variable is disclosed.

A classical linear regression model (CLRM) has some important and basic assumptions which cannot be violated in order to have reliable results. One is to notice perfect multicollinearity in the data which presents the association of study variables. For that purpose, a correlation matrix has been used to reflect the relationship between study variables.

Among the assumptions for reliable findings under the classical linear regression model (CLRM), one is that the error term [random disturbance] is as presented below. This study tests basic assumptions through Breusch-Pagan test

Var(μt)=σ²-----------------------------(1)

Hausman test is used for model specification (fixed effect vs random effect models). Through the following formula null hypothesis is checked to accept or reject it.

H=(β^FE-β^RE) (Var(β^FE)-Var(β^RE)]^-1(β^FE-β^RE)~x²------(2)

Where "β^FE" refers to fixed effect while "β^RE" refers to random effect. The statistics and significant value specify the appropriate approach between the two. Larger value of statistics leads to significant difference between estimators, so this will result to take the alternate hypothesis that fixed effect model.

It is used because of its appropriateness for panel data. The advantage is that it is fixed/constant even when the estimators have a a correlation with the effect of the individual. Through the following formula, data are analyzed using a fixed-effect model.

Y_it=α_it+β1X1_it+β2X2_it+ ---------------+βkXk_it+ μ_it

Where Y_it in the above equation is the DV every single with observation at time t, X_it is the regressor or the independent variables, alpha (α_i) is the effect of individual which is unobserved time-invariant and µ_it is the error term. Equation (1) is the main model including firm value as the dependent variable and the rest are explanatory variables to achieve the main objectives of the study.

TOBIN'Q_it=α₀+β₁BSIZE_it+β₂AUDQTY_it+β₃MangO_it+β₄CEOD_it+β₅B5OWN_it+β₆FSIZE_it+β₇Fage_it+ε ------ --------(1)

Whereas, α , β1, β2, β3...............β7 are the parameters.Ԑ is the error term. Other variables have already been defined

Correlation shows the strength of the linear relationship among all variables. It detects existent of perfect multicollinearity which violate the basic CLRM assumptions.

Breusch and Pagan established a model for the detection of heteroskedasticity which is known as the Lagrange Multiplier (LM ). It is the violation of the preliminary requirement of CLRM). For testing the null hypothesis for the existence of heteroskedasticity through Breusch-Pagan test, the question is whether "Data is homoscedastic or constant variance" while the alternative hypothesis is "Data is heteroskedastic".

To tackle the problem of endogeneity in the panel data and to use a suitable model, Hausman's test was used and it shows that the fixed effect model is a fitting one.

The relevant results of regression are shown in table below.

This research determined a causal association among various aspects of corporate governance and a firm's value. Findings revealed that two aspects among five of the corporate governance were statistically significant and have a major impact on a firm's value. Findings suggest managerial ownership and board size are more influential aspects affecting firm value while big five ownership, CEO duality, and audit quality are insignificant variables in the study. Findings of the study indicate that agency conflict within the firms is enhanced due to larger board size and managerial ownership which affect the firm's performance because managers will prioritize their own interest. Increase in board size increase variability and diversity and as a result, some key decisions may be deferreddue to lack of consensus which affects firm value negatively. Results of the study also show that both of the controlled variables that are firm's size and firm's age have a statistically significant and positive association with the firm's value supporting the study of Dewi and Wirajaya (2013). Larger firm size and age increase credibility of the firm within the market which results in building the investors' trust in the firm due to its sustainability. Hopefully they will invest in such firms, increasing demand for the share and increasing the stock price and as a result maximizing shareholder wealth and firm value.

The findings of the study support the view that agency conflict is a serious issue within the firm affecting its performance. Agency problems can be minimized through good governance measures. Results of the study will help policymakers to design an effective corporate governance mechanism for the better performance of the firms and to increas value. To enhance the firm's performance and value, managerial concentration should be limited to a minimum level and the rules of performance-based incentives should be implemented. Firms should also keep a low board size because it will eliminate the chance of variability and enhance the firm's performance and value.