The Consequences of Easy Credit Policy, High Gearing, and Firms’ Profitability in Pakistan’s Textile Sector: A Panel Data Analysis
AbstractThis study uses panel data on 75 textile firms for the period 2000–09 to examine the consequences of an easy credit policy followed by high gearing, increased financing costs, and other determinants of corporate profitability. Five out of nine explanatory variables—including gearing, financing costs, inflation, tax provisions, and the industry’s capacity utilization ratio—have a negative impact, while the remaining four variables—working capital management, asset turnover, exports, competitiveness, and devaluation—have a positive impact on firms’ profitability.
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Bibliographic InfoArticle provided by Department of Economics, The Lahore School of Economics in its journal Lahore Journal of Economics.
Volume (Year): 17 (2012)
Issue (Month): 1 (Jan-June)
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Web page: http://www.lahoreschoolofeconomics.edu.pk/EconomicsJournal/LJEIntro.aspx
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Easy credit; energy crisis; corporate profitability; textile sector; panel data; Pakistan.;
Find related papers by JEL classification:
- L78 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Government Policy
- L69 - Industrial Organization - - Industry Studies: Manufacturing - - - Other
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
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