Impact of Micro Economic Variables on Firms Performance

Ahmed Imran Hunjra (), Muhammad Chani, Sehrish Javed, Sana Naeem and Muhammad Shahzad Ijaz
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Ahmed Imran Hunjra: UIMS-PMAS-University of Arid Agriculture Rawalpindi, Pakistan
Sehrish Javed: UIMS-PMAS-University of Arid Agriculture Rawalpindi, Pakistan
Sana Naeem: UIMS-PMAS-University of Arid Agriculture Rawalpindi, Pakistan
Muhammad Shahzad Ijaz: UIMS-PMAS-University of Arid Agriculture Rawalpindi, Pakistan

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

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. The data for the study was extracted from the annual reports of all the companies. In this study panel data analysis is used. 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. This paper shows new insights for policy makers to improve the performance of Pakistani firms.

Keywords: Microeconomic Variables; ROA; ROE; Panel approach; Cement sector (search for similar items in EconPapers)
JEL-codes: O12 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (2)

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