Impact of Micro Economic Variables on Firms Performance

International Journal of Economics and Empirical Research. 2014, 2(2), 65-73

9 Pages Posted: 23 Aug 2018

See all articles by Ahmed Imran Hunjra

Ahmed Imran Hunjra

University of Waikato; Pir Mehr Ali Shah Arid Agriculture University Rawalpindi (PMAS)

Dr. Muhammad Irfan Chani

COMSATS University Islamabad

Sehrish Javed

Pir Mehr Ali Shah Arid Agriculture University Rawalpindi (PMAS)

Sana Naeem

Pir Mehr Ali Shah Arid Agriculture University Rawalpindi (PMAS)

Muhammad Shahzad Ijaz

Pir Mehr Ali Shah Arid Agriculture University Rawalpindi (PMAS)

Date Written: 2014

Abstract

Purpose: The aim of our study is to analyze the factors that affect performance of the cement sector focusing particularly on Pakistani firms. The study further finds the impact of size on performance, to examine the relationship between age of the firm and firm performance, to measure the effect of growth on firm’s performance and to highlight the impact of leverage on performance of the firm. There are twenty six cement companies listed in KSE. However, for the purpose of this paper only twenty companies were selected whose data was readily available over the period of eleven years from 2002 to 2012.

Methodology: The data for the study was extracted from the annual reports of all the companies. In this study panel data analysis is used.

Findings: After analyzing the data we have come to a point that all of the four variables have significant impact on the performance of the firm. We have seen that leverage has a positive impact effect on the performance of the firm when ROA is analyzed. Size, age and growth have a positive impact on return on equity (ROE) while leverage has a negative impact.

Recommendations: This paper shows new insights for policy makers to improve the performance of Pakistani firms.

Keywords: Microeconomic Variables, ROA, ROE, Panel approach, Cement Sector

Suggested Citation

Hunjra, Ahmed Imran and Chani, Muhammad Irfan and Javed, Sehrish and Naeem, Sana and Ijaz, Muhammad Shahzad, Impact of Micro Economic Variables on Firms Performance (2014). International Journal of Economics and Empirical Research. 2014, 2(2), 65-73. Available at SSRN: https://ssrn.com/abstract=3229712

Ahmed Imran Hunjra (Contact Author)

University of Waikato ( email )

Te Raupapa
Private Bag 3105
Hamilton, 3240
New Zealand

Pir Mehr Ali Shah Arid Agriculture University Rawalpindi (PMAS) ( email )

Muree Road Rawalpindi
Shamsabad, Punjab 44000
Pakistan
00923457162527 (Phone)

Muhammad Irfan Chani

COMSATS University Islamabad ( email )

Mailsi Road
Off Multan Road
Vehari, Punjab
Pakistan

HOME PAGE: http://ww3.comsats.edu.pk/faculty/FacultyDetails.aspx?Uid=19095

Sehrish Javed

Pir Mehr Ali Shah Arid Agriculture University Rawalpindi (PMAS)

Muree Road Rawalpindi
Rawalpindi, Punjab 44000
Pakistan

Sana Naeem

Pir Mehr Ali Shah Arid Agriculture University Rawalpindi (PMAS)

Muree Road Rawalpindi
Rawalpindi, Punjab 44000
Pakistan

Muhammad Shahzad Ijaz

Pir Mehr Ali Shah Arid Agriculture University Rawalpindi (PMAS) ( email )

Rawalpindi, 44000
Pakistan

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