In the context of pakistan, the regression model of risk management and firm performance under the parallel mediation by managerial autonomy and political intervention: a comparison of pakistani firms

Abstract

This study's foundation is the examination of the concurrent mediating functions of managerial autonomy and political intervention in the regression model of risk management and its effect on firm performance in the context of Pakistani businesses operating in a highly volatile and politically influenced economic environment. Based on Agency Theory, Stakeholder Theory, which holds that all stakeholders are significant, and Resource-Based View (RBV), the study employs a quantitative methodology based on data collected from 220 managers and senior executives from both government and state-owned enterprises (SOEs), with a comparison to private companies.Statistical analysis are done by using SPSS linear regression is used to test effect of risk management on firm performance and Andrew F. Hayes’ Process Macro (Model 4) reveals that political intervention and managerial autonomy have a positive partial parallel mediation in the relationship of risk management and firm performance. For testing correlation among variables spare man correlation test and for differentiation Man-Whitney U test is used. Managerial autonomy enhances the effectiveness and efficiency of risk management, on the other hand political intervention presents both supportive and limiting effects depending on the firm type. The findings also highlights a significant higher level of political intervention among SOEs with the comparison to private firms. The study provides critical theoretical contributions by means of proving a parallel mediation model and also highlights practical implications for governance reforms, especially in politically influenced firms I.e:SOE’S. Overall, this research informs the policymakers and leaders of a organization on how to balance political influence by political stakeholders with managerial freedom in emerging markets like Pakistan.