Impact of Uncertainty on Firm Level Investment: Evidence from Pakistan Textile Sector

International Journal of Economics and Empirical Research. 2016, 4(3), 124-132.

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)

Farida Faisal

Pir Mehr Ali Shah Arid Agriculture University Rawalpindi (PMAS) - Department of Management Sciences

Muhammad Shoaib

Pir Mehr Ali Shah Arid Agriculture University Rawalpindi (PMAS)

Qamar Abbas

Pir Mehr Ali Shah Arid Agriculture University Rawalpindi (PMAS)

Date Written: 2016

Abstract

Purpose: This study investigates the relationship between uncertainty and firm’ s level investment by using the data from Pakistani textile sector for period of 2000 to 2013.

Methodology: The data is collected from financial statements of companies and official website of Karachi stock exchange. Uncertainty is divided into three dimensions e.g. firm level uncertainty, market level uncertainty and economic level uncertainty. Uncertainties are measured by volatility of firm’s specific stock returns, volatility of market returns, and exchange rate volatility respectively. The collected data was measured through random effect model.

Findings: The results showed that firm level uncertainty and market level uncertainty are significantly and positively related to firm-level investment, but economic level uncertainty is found negatively related to firm level investment.

Recommendations: The policies should be made for long term to secure firms from macro level uncertainty.

Keywords: Uncertainty, Investment, Random Effect Model

JEL Classification: D92

Suggested Citation

Hunjra, Ahmed Imran and Faisal, Farida and Shoaib, Muhammad and Abbas, Qamar, Impact of Uncertainty on Firm Level Investment: Evidence from Pakistan Textile Sector (2016). International Journal of Economics and Empirical Research. 2016, 4(3), 124-132.. Available at SSRN: https://ssrn.com/abstract=3229726

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)

Farida Faisal

Pir Mehr Ali Shah Arid Agriculture University Rawalpindi (PMAS) - Department of Management Sciences ( email )

Pakistan

Muhammad Shoaib

Pir Mehr Ali Shah Arid Agriculture University Rawalpindi (PMAS)

Muree Road Rawalpindi
Rawalpindi, Punjab 44000
Pakistan

Qamar Abbas

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

Rawalpindi, 44000
Pakistan

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