IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/122928.html

Monetary Policy and the Survival Analysis of the Firms in Pakistan

Author

Listed:
  • Shabbir, Safia

Abstract

Using the information on 629 companies listed at Karachi stock exchange over a period of 40 years (1975-2014), this study finds out the effect of monetary policy and industrial dynamics over the hazard rate of both the financial and non-financial companies. The study concludes that monetary contraction increases the probability of exit of the companies by 44 percentage points, while LSM growth and age reduces the hazard rate. Further companies in textiles are most likely to exit, while firms working in food & beverages, cement & construction and chemical & engineering are less likely to exit. On the other hand, credit growth increases the risk of exit for the financial companies and rise in weighted average lending rate reduces the probability of exit. Moreover, well-established companies are less likely to leave the market.

Suggested Citation

  • Shabbir, Safia, 2017. "Monetary Policy and the Survival Analysis of the Firms in Pakistan," MPRA Paper 122928, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:122928
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/122928/1/MPRA_paper_122928.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. P. Holmes & A. Hunt & I. Stone, 2010. "An analysis of new firm survival using a hazard function," Applied Economics, Taylor & Francis Journals, vol. 42(2), pages 185-195.
    2. Giorgia Giovannetti & Giorgio Ricchiuti & Margherita Velucchi, 2011. "Size, innovation and internationalization: a survival analysis of Italian firms," Applied Economics, Taylor & Francis Journals, vol. 43(12), pages 1511-1520.
    3. Safia Shabbir, 2012. "Monetary Transmission in Pakistan: The Balance Sheet Channel," SBP Working Paper Series 49, State Bank of Pakistan, Research Department.
    4. M. Ali Choudhary & Amjad Ali & Shah Hussain & Vasco J Gabriel, 2012. "Bank Lending and Monetary Shocks: Evidence from a Developing Economy," Working Papers id:4771, eSocialSciences.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Shabbir, Safia, 2012. "Balance Sheet Channel of Monetary Policy and Economic Growth under Fiscal Dominance: Evidence from Pakistan," MPRA Paper 41496, University Library of Munich, Germany.
    2. Rafaelita M. Aldaba, . "Understanding the Relationship Between Globalization and Survival of Philippine SMEs," Chapters, in: Chin Hee Hahn & Dionisius A. Narjoko (ed.), Globalization and Performance of Small and Large Firms, chapter 7, pages VII-1 - V, Economic Research Institute for ASEAN and East Asia (ERIA).
    3. Francisco Puig & Miguel González-Loureiro & Pervez N. Ghauri, 2014. "Internationalisation for Survival: The Case of New Ventures," Management International Review, Springer, vol. 54(5), pages 653-673, October.
    4. Gregory D. Graff & Felipe de Figueiredo Silva & David Zilberman, 2020. "Venture Capital and the Transformation of Private R&D for Agriculture," NBER Chapters, in: Economics of Research and Innovation in Agriculture, pages 213-245, National Bureau of Economic Research, Inc.
    5. Rodrigo Fuentes & Jorge Dresdner, 2013. "Survival of micro-enterprises: Does public seed financing work?," Applied Economics Letters, Taylor & Francis Journals, vol. 20(8), pages 754-757, May.
    6. Shabbir, Safia & Iqbal, Javed & Hameed, Saima, 2013. "Risk Premium, Interest Rate Differential, and Subsidized Lending in Pakistan," MPRA Paper 48250, University Library of Munich, Germany.
    7. Ratbek Dzhumashev & Vinod Mishra & Russell Smyth, 2011. "Exporting, R&D Investment and Firm Survival," Monash Economics Working Papers 39-11, Monash University, Department of Economics.
    8. Ugur, Mehmet & Trushin, Eshref & Solomon, Edna, 2016. "Inverted-U relationship between R&D intensity and survival: Evidence on scale and complementarity effects in UK data," Research Policy, Elsevier, vol. 45(7), pages 1474-1492.
    9. Paulo Maçãs Nunes & Zélia Serrasqueiro & Jacinto Vidigal da Silva, 2014. "Family-owned and non family-owned SMEs: empirical evidence of survival determinants," Economics and Business Letters, Oviedo University Press, vol. 3(1), pages 68-76.
    10. Ling Lu, 2024. "How does company misconduct affect company survival risk?—evidence from China," PLOS ONE, Public Library of Science, vol. 19(12), pages 1-25, December.
    11. Safia Shabbir, 2013. "Implications of Monetary Policy for Corporate Sector and Economic Growth in Pakistan," SBP Working Paper Series 61, State Bank of Pakistan, Research Department.
    12. Paulo Maças Nunes & Z�lia Serrasqueiro, 2012. "Are young SMEs' survival determinants different? Empirical evidence using panel data," Applied Economics Letters, Taylor & Francis Journals, vol. 19(9), pages 849-855, June.
    13. Marco Grazzi & Chiara Piccardo & Cecilia Vergari, 2022. "Turmoil over the crisis: innovation capabilities and firm exit," Small Business Economics, Springer, vol. 59(2), pages 537-564, August.
    14. Arslan Majeed & Shahid Mansoor Hashmi & Romila Qamar, 2017. "Monetary Policy Transmission and Firms’ Investment: Evidence From the Manufacturing Sector of Pakistan," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 20(66), pages 2-34, December.
    15. Ornella Wanda Maietta & Fernanda Mazzotta, 2018. "Firm Survival and Innovation: Knowledge Context Matters!," CSEF Working Papers 496, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    16. Anna Maria Ferragina & Rosanna Pittiglio & Filippo Reganati, 2014. "Does multinational ownership affect firm survival in Italy?," Journal of Business Economics and Management, Taylor & Francis Journals, vol. 15(2), pages 335-355, April.
    17. Peter Nunnenkamp & Hannes Öhler & Tillmann Schwörer, 2011. "US based NGOs in International Development Cooperation: Survival of the Fittest?," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 83, Courant Research Centre PEG.
    18. Doan, Quang Hung & Vu, Hoang Nam & Dao, Ngoc Tien, 2013. "Sub-National Institutions and Firm Survival in Vietnam," MPRA Paper 63653, University Library of Munich, Germany.
    19. Joana Afonso & Isabel Mota & Sandra Silva, 2012. "Micro Credit and Territory: Portugal as a case study," Notas Económicas, Faculty of Economics, University of Coimbra, issue 35, pages 40-58, June.
    20. Pål Børing, 2015. "The effects of firms’ R&D and innovation activities on their survival: a competing risks analysis," Empirical Economics, Springer, vol. 49(3), pages 1045-1069, November.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:122928. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.