Impact of Stock Market and Bank Development on the Firm’s Growth: Evidence from Pakistan

IF 0.5 Q4 BUSINESS International Journal of Business Pub Date : 2021-04-30 DOI:10.20469/IJBAS.7.10002-2

Qasim Khan, Mao Xinshu, M. Haider, Afaq Haider Jaffari

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Abstract

Aim: Despite years of empirical research, the nexus between banks development and the stock market with economic growth is still controversial. This study examined the impact of the stock market and banks development on the firm’s growth in Pakistan. The sector of non-financial firms chosen for analysis and financial firms ignored because of different structure. The sample of 45 firms listed on the Pakistan Stock Exchange (PSX) from the period of 2014-2019 used for the analysis. The sample has been selected based on the firm’s market capitalisation and random effect model to estimate both institution development and firm growth. We controlled the firm’s profitability, interest, and inflation. The results are robust to the Estimated Generalised Least Squares (EGLS) method. Results showed that significant positive relation exists between stock market development and firm growth, while a negative association exists between banks development and firm growth. Furthermore, control variables (profitability, interest, and inflation) have a significant negative impact on firm growth. The findings contribution in literature with perspective to Pakistan because prior studies done related to developed countries. Policymakers may use this study for making policy related to firms and economic growth.

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股票市场和银行发展对公司增长的影响:来自巴基斯坦的证据

目的：尽管进行了多年的实证研究，但银行发展和股市与经济增长之间的关系仍然存在争议。这项研究考察了股票市场和银行发展对该公司在巴基斯坦的增长的影响。选择进行分析的非金融企业部门和因结构不同而被忽视的金融企业部门。分析使用了2014-2019年期间在巴基斯坦证券交易所上市的45家公司的样本。样本是根据公司的市值和随机效应模型选择的，用于估计机构发展和公司增长。我们控制了公司的盈利能力、利息和通货膨胀。结果对估计广义最小二乘法（EGLS）具有鲁棒性。结果表明，股票市场发展与企业成长之间存在显著的正相关关系，而银行发展与企业增长之间存在负相关关系。此外，控制变量（盈利能力、利息和通货膨胀）对公司增长有显著的负面影响。研究结果对巴基斯坦的文献有贡献，因为之前的研究与发达国家有关。政策制定者可以利用这项研究制定与企业和经济增长相关的政策。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

International Journal of Business BUSINESS-

CiteScore

0.70

自引率

0.00%

发文量

期刊介绍： The Journal will serve and provide a forum for exchange of ideas among business executives and academicians concerned with global business and economic issues. With the rapid evolution of corporate business from international to global in recent years, general business has been one of the areas of greatest added complexity and concern for corporate managers. It is no longer sufficient for the corporate manager to limit his/her study simply to the domestic aspects of general business. Almost every single topic that can be studied in general business now has global dimensions that are equally important. As such, practitioners and academicians, each with a unique perspective on global business, must go beyond the presently limited sharing of information and ideas. The Journal will be an academic journal combining academic inquiry and informed business practices. It will publish empirical, analytical, review, and survey articles, as well as case studies related to all areas of global business and economics. A sentiment often expressed by practitioners is that academic research in general may not be addressing the most relevant questions in the real world. To bridge some gaps in our knowledge of the real world, the Journal is thereby willing to sponsor a field research (such as surveys, in-depth interviews, on-site studies, etc.). It is fair to say that the Journal will publish high-quality applied-research papers. Nevertheless, studies that test important theoretical works and shed additional light on the issue with some business implications will also be solicited.