IMPACT OF MACROECONOMIC VARIABLES ON FINANCIAL PERFORMANCE: EVIDENCE OF AUTOMOBILE ASSEMBLING SECTOR OF PAKISTAN STOCK EXCHANGE
DOI:
https://doi.org/10.31529/sjms.2018.4.2.6Keywords:
Macroeconomic Variables, ROA, ROE, GPM, GMMAbstract
The study examines the macroeconomic variables impact on financial performance, using the financial statement of listed companies in Automobile sector of Pakistan stock exchange. The study covered the period from 2007 to 2016. Before applying the GMM model the preliminary test was done. Firm performance is measured with three ratios i.e., return on assets (ROA), return on equity (ROE) and gross profit margin ratio (GPM). The results revealed that the selected macroeconomics variables have the negative relationship with return on equity, return on assets and gross profit margin and the inflation has positive relation with return on equity and negative relation with return on assets (ROA) and gross profit margin (GPM).
References
Borhan, H., Naina Mohamed, R., & Azmi, N. (2014). The impact of financial ratios on the financial performance of a chemical company: The case of Lyondell Basell Industries. World Journal of Entrepreneurship, Management and Sustainable Development, 10(2), 154-160.
Boyd, J. H., Levine, R., & Smith, B. D. (2001). The impact of inflation on financial sector performance. Journal of Monetary Economics, 47(2), 221-248.
Hasan, M. B., Ahsan, A. M., Rahaman, M. A., & Alam, M. N. (2014). Influence of capital structure on firm performance: Evidence from Bangladesh. International Journal of Business and Management, 9(5), 184-197.
James, C., Van, H., & John, M. (2008). Fundamentals of Financial Management. Prentice Hall Inc.
Kelilume, I. (2016). Exchange rate volatility and firm performance in Nigeria: A dynamic panel regression approach. The Journal of Developing Areas, 50(6), 161-174.
Khan, A. G. (2012). The relationship of capital structure decisions with firm performance: A study of the engineering sector of Pakistan. International Journal of Accounting and Financial Reporting, 2(1), 245-259.
Khan, F., Rasli, A. M., Yusoff, R. M., Ahmed, T., Rehman, A., & Khan, M. M. (2014). Job rotation, job performance, organizational commitment: An empirical study on bank employees. Journal of Management Info, 3(1), 33-46.
Khan, F., Q. Khan, et al. (2016). Effect of disengagement on organizational commitment among universities academicians: An empirical study. PUTAJ-Humanities and Social Sciences 23(2), 113-125.
Khan, F., Yusoff, R. M. Khan, A. (2014). Effect of human resource practices on job satisfaction in Pakistan. Sains Humanika 1(1), 53-57.
Khan, F., Rasli, A. M., Yusoff, R. M., Malik, M. M., Khan, M. M., & Khan, Q. (2014). Effect of emotional exhaustion on organizational commitment among academicians. Science International 26(5), 2523-2527.
Khan, F., Ullah, A., Ali, M. A., & Khan, M. I. (2018). The relationship between macroeconomic variables and the dividend payout ratio of the textile sector listed on Pakistan stock market. Sarhad Journal of Management Sciences, 4(1), 111-121.
Khan, F., Yusoff, R., & Khan, A. (2014). Job demands, burnout and resources in teaching a conceptual review. World Applied Sciences Journal, 30(1), 20-28.
McNamara, R., & Duncan, K. (1995). Firm performance and macro-economic Variables. Bond University Library, E-Publication.
Ouma, W. N., & Muriu, P. (2014). The impact of macroeconomic variables on stock market returns in Kenya. International Journal of Business and Commerce, 3(11), 1-31.
Özlen, S., & Ergun, U. (2012). Macroeconomic factors and stock returns. International Journal of Academic Research in Business and Social Sciences, 2(9), 315.
Pervaiz, J., Masih, J., & Jian-Zhou, T. (2018). Impact of macroeconomic variables on Karachi Stock Market returns. International Journal of Economics and Finance, 10(2), 28-39.
Rajendran, K., & Nimalthasan, P. (2013). Capital structure and its impact on firm performance: A study on Sri Lankan listed manufacturing companies. Merit Research Journal of Business and Management, 1(2), 37-44.
Raza, M. W. (2013). Effect of financial leverage on firm performance. Empirical evidence from Karachi Stock Exchange. Munich Personal RePEc Archive.
Downloads
Published
Issue
Section
License
Submission of an original manuscript to the Journal will be taken to mean that it represents original work not previously published, that it is not being considered elsewhere for publication. And if accepted for publication, it will be published in print and online and it will not be published elsewhere.
The journal main policy reflects in its stance that the publication of scholarly research is exclusively meant to disseminate knowledge and not-for-purposes.
Copyright Statment
Sarhad Journal of Management Sciences is published by Sarhad University of Science and Information Technology Peshawar. This copyright statement entails that all contents (including text, tables, graphs, images, or any materials that is part and parcel of a research article submitted to the journal) belong to/ property of the person who owned it prior to submission this journal. Publication of the submitted article will not affect the ownership of copyright of the subject materials. SJMS and its users benefit from a general licence over all content submitted under a Creative Commons CC-BY licence over all content. However, content which is not part of the submitted article, is the property of SJMS. In a nutshell, the combination of all content on the SJMS website, the look and feel of the website, is the property of Sarhad University of Science and Information Technology Peshawar.
As an author or contributor, you grant permission to others to reproduce your articles, including any graphics and third-party materials supplied by you, in accordance with the SJMS Terms and Conditions. The licence granted to third parties over all contents of each article, including third-party elements, is a Creative Commons Attribution ("CC BY") licence. The current version is CC-BY, version 4.0 (http://creativecommons.org/licenses/by/4.0/), and the licence will automatically be updated as and when updated by the Creative Commons organisation.
You may include a requirement to reproduce copyright notices but you may not restrict the right to reproduce the entire article, including third-party graphics. This means that you must obtain any necessary third-party consents and permissions to reproduce third-party materials in your articles submitted to SJMS.
Copyright Statement updated September 13, 2022.