MACROECONOMIC FACTORS AND FIRM PERFORMANCE: AN EMPIRICAL INVESTIGATION FROM LISTED FIRMS OF PAKISTAN AUTOMOBILE INDUSTRY

Abstract

This study examines the impact of macroeconomic variables on the performance of listed firms in Pakistan's automobile industry from 2010 to 2021. The OLS (Fixed, Random) estimation method is used to gauge the impact of macroeconomic variables on firm
performance. Results indicate that inflation, interest rates and GDP growth have insignificant effects on performance proxies (i.e., return on assets, return on equity and market-to-book ratio). This study tries to fill a gap in the literature, to investigate the impact of macroeconomic factors on firm performance in the context of the automobile industry in Pakistan.