http://www.iaeme.com/IJM/index.asp 1957 editor@iaeme.com International Journal of Management (IJM) Volume 11, Issue 8, August 2020, pp. 1957-1968, Article ID: IJM_11_08_173 Available online at http://www.iaeme.com/IJM/issues.asp?JType=IJM&VType=11&IType=8 ISSN Print: 0976-6502 and ISSN Online: 0976-6510 DOI: 10.34218/IJM.11.8.2020.173 © IAEME Publication Scopus Indexed IMPACT OF CASH FLOW ON FIRM PERFORMANCE UNDER CAPITAL MARKET IMPERFECTIONS: EVIDENCE FROM PAKISTANI LISTED MANUFACTURING FIRMS Muhammad Kashif Lecturer, Govt. Degree College Khurrianwala Faisalabad, Pakistan; MS Business Administration NUML Islamabad, Pakistan. Bilal Atique “Master of Business Administration, National University of Modern Languages (NUML) Islamabad, Pakistan.” Muhammad Kashif Khurshid* Lecturer, National University of Modern Languages (NUML) Islamabad, Pakistan. Muhammad Imran “Master of Business Administration, National University of Modern Languages (NUML) Islamabad, Pakistan.” Imtiaz Zahid Assistant Professor, Government Islamia College Faisalabad, Pakistan. *Corresponding Author ABSTRACT In the present research work the relationship is measured between the cash flow and firm performance by taking the 137 non-financial manufacturing firms listed in the Pakistan Stock Exchange (PSX) during the period of 10 years 2006-2015.The relationship is measured two times in the presence and in the absence of capital market imperfections. Capital market imperfections cannot be measured directly, so to measures these imperfections three proxies such as institutions ownership, firm’s size and liquidity can be used. Firm performance was measured with the help of return of assets and return on equity. To check the relationship among the cash flow and firm performance panel data regressions are used. The result shows a positive significant relationship among the cash flow and firm performance, but the relation is more affirmative and significant in the presence of capital market imperfections. It