A FINANCIAL PERFORMANCE COMPARISON OF GROUP AND NON-GROUP FIRMS IN TEXTILE SECTOR OF PAKISTAN

Ishtiaq Ahmad and Syed Zaheer ABBAS Kazmi
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Ishtiaq Ahmad: Faculty of Economics and Business, University of Debrecen; Faculty of Management Sciences, NUML, Islamabad Pakistan
Syed Zaheer ABBAS Kazmi: Faculty of Economics and Business, University of Debrecen; Faculty of Management Sciences, NUML, Islamabad Pakistan

Network Intelligence Studies, 2016, issue 8, 143-150

Abstract: Pakistan is a developing economy and business groups are key players of the Pakistan’s economy. Previous research evidence shows that in the emerging economies group affiliation creates value for the firms. This study is intended to empirically investigate to know that whether group affiliated (GA) firms perform financially better than non-group affiliated firms or not? GA firms in emerging economies can have better financial performance by sharing tangible and intangible resources at group level. The financial ratio is used to compare performance of affiliated and non-group affiliated firms by using the data of 70 textile firms listed at Karachi Stock Exchange(now Pakistan Stock Exchange) covering a period from 2008 to 2012. Based on mean values of return on assets (ROA), results of the study show that GA firms have higher financial performance than non-group affiliated firms in each year and over all five years.

Keywords: Business Groups; Financial Performance; Profitability; Group Affiliated; Pakistan (search for similar items in EconPapers)
JEL-codes: G32 (search for similar items in EconPapers)
Date: 2016
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