Based on the theoretical underpinnings of the agency theory and liquidity theory, the purpose of this study is to show how managers who want to enhance the performance of Pakistan’s non-financial sector can use liquidity policy in relation to corporate governance. Nowadays, Pakistan is facing a severe liquidity crisis; this study contributes by examining the mediating role of liquidity on the link of corporate governance-performance. We use data from 63 firms from 2010 to 2018, excluding 17 outliers. To analyze the data, we use the Seemingly Unrelated Regression (SURE) model and nlcom-Stata test. Our findings support the mediating role of liquidity on the link between corporate governance and performance. In addition, the results show that corporate governance improves performance. Furthermore, the study supports a significant positive association of liquidity and performance. For robustness, we use two performance variables – return on assets (ROA) and Tobin’s q (TQ) – where ROA represents full mediation and TQ indicates partial mediation. This study helps to use liquidity policy to strengthen the inside and outside dimensions of corporate governance mechanisms that improve the performance of firms. Overall, these findings suggest better disclosure, transparency, and solutions to auditing issues that add value to the firms.

Abstract
1. Introduction
2. Literature Review
    2.1. Agency Theory
    2.2. Asymmetric Information Theory
    2.3. Empirical Review
    2.4. Theoretical Framework
3. Research Methodology
    3.1. Liquidity Measurement
    3.2. Pakistan CGI Measurement
    3.3. Measurement of Mediating Variable
    3.4 Econometric Models
    3.5. Estimation Techniques
4. Results and Discussions
5. Discussions and Implications
6. Conclusion and Limitations
References

• Safdar Husain TAHIR(Lyallpur Business School, Government College University, Faisalabad, Pakistan) Corresponding Author
• Muhammad Abu Bakar SADIQUE(College of Commerce, Government College University, Faisalabad, Pakistan)
• Nausheen SYED(Business Administration, Government College Women University, Faisalabad)
• Faiza REHMAN(Public Administration, Government College Women University, Faisalabad, Pakistan)
• Muhammad Rizwan ULLAH(Lyallpur Business School, Government College University, Faisalabad, Pakistan)