Abstract
This paper intends to test the impact of CG (corporate governance), CS (capital structure), and DP (dividend policy) on ROA (returns of assets) whereas political instability has been introduced as moderating variable. Textile sector of Pakistan is considered as unit of analysis to achieve the research objective. Total 56 listed companies has been selected out of which 27 companies has been selected over the period of 2012-2016 data has been collected from the audited annual reports. Three determinants of corporate governance have been used to BS (board size), AC (audit committee), and BC (board composition), three determinants to measure the dividend policy EPS (earning per share), DY (dividend yield), and DP ratio (dividend payout ratio) and two determinants used to measure capital structure STD-Ratio (short-term debt) and DEBT-Ratio (debt ratio). Returns on asset as proxy as measure of firm performance (financial). Political instability has been used as moderator and data has been collected from the World Bank indicators. All the determinants of CG, CS and DP indicates a significant and positive relationship with ROA moreover, political instability moderates the relationship.