THE MODERATING ROLE OF CORPORATE GOVERNANCE IN THE EFFECT OF FINANCIAL LEVERAGE, FIRM SIZE, AND LIQUIDITY ON SUSTAINABLE FINANCIAL PERFORMANCE IN SELECTED LISTED FOOD INDUSTRY COMPANIES IN MUSCAT STOCK EXCHANGE, OMAN

Abstract

This paper analyzed the moderation role of corporate governance in the association among the sustainable financial performance of selected food industry companies listed on the Muscat Stock Exchange (MSX), Oman, as governed by data from October 2023. Although prior research has investigated these financial determinants in isolation, their joint influence on sustainability in the food sector is yet underexplored. This study analyzes the financial data of 11 listed food industry companies during the period 2018–2023 using a quantitative panel data approach. In view of this, the study utilizes a causal-comparative (ex-post facto) method of analysis and is inevitably dependent on regulatory disclosures and financial reports as secondary data sources. The ratio of debt to equity measures financial leverage, total assets measure firm size, and the current ratio measures liquidity. Board autonomy and board size are used as operational proxies for corporate governance. The research employed panel data regression models and moderation analysis employing hierarchical regression to analyse the interplay between these variables. However, these findings are expected to give insight into the extent to which effective corporate governance mechanisms can lead to financial sustainability through optimising capital structure and liquidity management. This study endeavors to extend the furtherance of corporate governance literature whilst providing some practical perspectives for stockholders and financial executives working in Oman’s food industry. By doing so, these outcomes will emphasize the significance of board structures in minimizing financial risk and achieving sound long-term financial performance. In doing so, this study fills a research gap that has the potential to offer a rich understanding of financial strategies that can contribute to enabling sustainable performance among firms of food industry operating within the MSC, thereby promoting economic resilience in the subsector.