The Basic Determinants Of Financial And Economic Performance Of Firms: A Case Of Karachi Stock Exchange, Pakistan

Abstract

This study investigates potential relationships between the company's financial performance and capital structure, ownership structure, corporate governance, risk management, and economic indicators. It's also one of the few instances that looks at different factors influencing a company's performance in a developing market (Pakistan). In this study, 57 Pakistani corporate firms listed on the Karachi stock exchange from 2018 to 2022 are examined for their profitability and its relationship to multiple determinants. A fixed effect model is used to attempt and to explain the behavior under observation. Although the strength of the relationship varies across various performance areas, the results consistently suggest the possible correlation between a firm's financial success and economic indices, corporate governance, ownership structure, and capital structure. While there are contradictory findings for various variables, we find evidence to support the assumptions that corporate governance, risk management, and performance are positively correlated.