Prakash Kumar Gautam

Firm performance is of global interest for sustainable growth and is a function of multiple factors. Market share is often considered the source of competitive position and ability to generate financial performance. By understanding these dynamics, organizations can develop tailored strategies incorporating corporate governance to enhance competitiveness for improved performance outcomes. This study examines the impact of market share on firm performance, considering the moderated effect of firm size and mediating effects of corporate governance with capital structure, growth, and innovation as control variables. This study relies on seven-year firm-level data, utilizing an uneven sample of 40 non-financial companies listed on the Nepal Stock Exchange (NSE) and encompassing 280 observations. A causal-comparative research design was used with Process Macro tools in a moderated mediating model to examine the hypotheses. The results revealed a significant impact of market share on firm performance, i.e., ROA (β = 0.195, p < 0.01) and Tobin’s Q (β = 0.232, p < 0.01). Additionally, firm size moderated negatively (β = –0.82, p < 0.01), while corporate governance positively mediated the relationship (β = 0.184, p < 0.01; Tobin’s Q: β = 0.188, p < 0.05). Control variables had no significant impact on corporate governance. The study highlights the implication of balance of market share, corporate governance, and innovation with firm size for the firm’s performance. By utilizing these insights, firms can create strategic initiatives to boost competitiveness, improve resource allocation, and reinforce governance practices.

Acknowledgment
We acknowledge all the individuals who supported this research process directly and indirectly. We also thank the anonymous reviewers for their valuable comments on improving the quality of the paper.

Corporate structure decisions are the foundation of a company’s legal, financial, and operational framework, influencing diverse issues, from liability and tax obligations to growth potential and public perception. The paper aims to analyze the effect of firms’ financial performance on capital structure decisions. Firm size and corporate governance were taken as moderators and mediators, respectively. The study is based on 23 non-banking public firms listed on the Nepal Stock Exchange, adapting a causal-comparative research design. The moderated mediation model was tested using the Process Macro to assess the impact of corporate governance scores on the relationship between firm performance and capital structure. The result shows that firm performance positively and significantly impacts capital structure decisions. The results revealed no effect of corporate governance on capital structure decisions; however, the moderated mediation impacts of corporate governance and firm size have been reflected in the financing decision. This study extends previous research with the moderated mediation effects of corporate governance and the size of non-banking firms on their financing decisions. The results encourage managers to raise debt funds for those firms that observe the firm’s size, providing practical insights into business decisions. The study also has policy and theoretical implications.

Acknowledgment
We are grateful to everyone who contributed directly or indirectly to the research. We also appreciate the anonymous reviewers’ insightful feedback, which helped enhance the quality of the paper.