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Impact of Micro Economic Variables on Firms Performance

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  • Hunjra, Ahmed Imran
  • Chani, Muhammad Irfan
  • Javed, Sehrish
  • Naeem, Sana
  • Ijaz, Muhammad Shahzad

Abstract

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.

Suggested Citation

  • Hunjra, Ahmed Imran & Chani, Muhammad Irfan & Javed, Sehrish & Naeem, Sana & Ijaz, Muhammad Shahzad, 2014. "Impact of Micro Economic Variables on Firms Performance," MPRA Paper 60792, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:60792
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    References listed on IDEAS

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    Cited by:

    1. Rashid Mehmood & Ahmed Imran Hunjra & Muhammad Irfan Chani, 2019. "The Impact of Corporate Diversification and Financial Structure on Firm Performance: Evidence from South Asian Countries," JRFM, MDPI, vol. 12(1), pages 1-17, March.
    2. Bruce MASAMA & Juan-Pierré BRUWER, 2018. "Revisiting the Economic Factors which Influence Fast Food South African Small, Medium and Micro Enterprise Sustainability," Expert Journal of Business and Management, Sprint Investify, vol. 6(1), pages 19-28.

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    More about this item

    Keywords

    Microeconomic Variables; ROA; ROE; Panel approach; Cement sector;
    All these keywords.

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies

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