الأعمال السياسية والإصلاحية للشيخ ولي أحمد في إقليم سوات خيبر پختونخوا

Sheikh Walī Ahmad nick named as Sandâkī Baba was a famous political leader, reformer, sūfī saint and literary personality of Swat (KPK), Pakistan. In the subcontinent, he also contributed in freedom movement against the English imperialism like other literary and political workers. Especially he was the founder of Swat State. In this article political, scholarly and reform services of Sheikh Sandâkī has been highlighted.

Determinants of Financial Conservatism and its Impact on Shareholder Wealth: Empirical Evidence from Pakistan

The concept of financial conservatism has emerged as a challenging phenomenon for almost all capital structure theories. The use of less than optimal debt level in the capital structure is called financial conservatism. As, cash is considered as an alternative for debt, thus, “firms in the lowest quintile of net debt ratio are classified as financially conservative (FC) firms”. This phenomenon is fairly in contrast to the basic premise of capital structure theories so it has grabbed the attention of academics in recent decade. Surprisingly, some researchers have proved that financial conservatism positively influence the shareholders’ value. However, the empirical evidence is scarce. Especially, this phenomenon is not yet examined in Pakistan. The aim of this study is not only to investigate the determinants of financial conservatism but also to examine its impact on the shareholders’ wealth in Pakistani firms. This also contributes the literature by comparing the speed of adjustment towards target capital structure between financially conservative and non-financially conservative firms. Furthermore, the motives as well as long run performance of financially conservative firms are compared between sub groups of financially conservative firms. These groups include dividend paying and zero dividend firms, financial surplus and deficit firms, and business group and non-business group firms. This is the first study that empirically explores the prevalence and determinants of financial conservatism at Pakistani nonfinancial firms during the period 1998–2014. It also examines the empirical determinants of switching from a conservative financial policy to a non-conservative financial policy and vice versa. Along with several firm-specific variables as predictors of the most prominent theories, the effects of macroeconomic conditions and business group affiliation are also investigated. The firms, that rank the bottom quintile of industry-adjusted debt ratio (net of cash) for two sequential years are categorized as financially conservative firms. The financially conservative (FC) firms are assigned a value ‘1’ while rest of the non-financially conservative (NFC) firms is assigned ‘0’ for the purpose of analysis. Due to the binary dependent variable, the determinants are analysed using logistic regression analysis. For the purpose of measuring the target net debt ratio GMM is used. While OLS is used for estimating the speed of adjustment. It is examined when and to what extent these firms adjust their leverage towards the target. The long run performance for financially conservative firms is estimated by taking monthly data of stock returns for 1,2,3,4 and 5 years using CAPM and Fama & French three-factor model. The results of the study show that approximately 14 percent of the firmyear observations are financially conservative. The pervasiveness of this phenomenon can be judged from the fact that the ratio of financial conservatism almost doubled over that period, from 11.25 percent in 1999 to 20.76 percent in 2014. More than 30 percent of the firms maintain this policy for at least five years. The financially conservative firms are more profitable, less risky, and pay higher dividends than their counterparts. The results of the logistic regression reveal that the pecking order theory and financial flexibility are the most powerful motives for avoiding debt financing. Moreover, business group affiliated firms are more likely to follow financial conservatism. The results for speed of adjustment reveal that the adjustment process is quite asymmetric for NFC than FC firms. Moreover, the magnitude of the speed of adjustment (SOA) is always greater for NFC than FC firms. The FC firms show higher SOA when they deviate below the target regardless of financial imbalances. In contrast, NFC firms are more responsive to financial deficits irrespective of the deviation from the target. Both FC and NFC firms move with higher SOA towards the target capital structure when they deviate below the target and face financial deficits. The results of the study show positive and significant alphas for CAPM and Fama & French three-factor model throughout the time periods for FC firms. It can be concluded that FC firms generate positive abnormal returns over the long run. More specifically, the performance of all sub-groups of FC firms divided on the basis of business group affiliation, dividend-paying status and financing needs is positive throughout the investment time horizon. These results show that financially conservative policy positively affects the shareholders’ wealth regardless of any classifications. Financial conservatism can be used strategically for enhancing the shareholders’ value over the long run. Low net debt ratio of a firm can be considered as an important determinant of market returns