Firm Aggressiveness And Respective Performance Empirical Study Under Pakistan Essay

1501 Words Aug 2nd, 2016 7 Pages
Firm Aggressiveness and Respective Performance Empirical Study under Pakistani Setting
Obaid Ur Rehman - Lecturer at CFCBE, CECOS University, Peshawar Pakistan bluechip1122@gmail.com Abstract
Finance manager aggressiveness regarding designing capital structure (especially working capital) which yields optimum return is a debatable matter from last 50 years. The phenomenon is still vague especially in Pakistan because of the information asymmetry and failure of perfect market hypothesis. The study investigates capital structure of all non financial listed firms on Pakistan Stock Exchange (PSX) for the period of 2008 to 2014. To test the relation between dependent (ROI and ROA) and independent variables (AIP and AFP), the study employ control variables (ROE, ROCE, GROWTH, SIZE and AGE) and uses exponential generalized least square regression. Results (Table 4.3, Appendix) reveals that financial managers aggressiveness regarding financial policy negatively, while aggressiveness regarding investment policy positively effecting the firm’s performance. The study also found that with the passage of time, firms in Pakistan devastating their performance. That’s why study found negative relation between firms’ age and dependent variables.

Keywords: Capital Structure, Firm’s Performance, ROI, ROA, AIP, AFP. Introduction
Financial performance of firm and its value is greatly affected by the design of its capital structure. This issue is getting immense consideration after the MM,…
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