Business and Economic Research ISSN 2162-4860 2013, Vol. 3, No. 2

Determinants of Firm’s Financial Performance: An Empirical Study on Textile Sector of Pakistan
Ali Abbas (Corresponding Author) Hailey College of Commerce, University of the Punjab Lahore, Pakistan Tel: 92-333-897-4480 E-mail: mianali348@hotmail.com

Zahid Bashir Faculty of Finance at School of Business, Economics & Management Sciences Imperial College of Business Studies Lahore, Pakistan Tel: 92-323-849-8515 E-mail: zahid.bashir.332@gmail.com

Shahid Manzoor Hailey College of Commerce, University of the Punjab Lahore, Pakistan Tel: 92-313-413-1676 E-mail: shahidmanzoor09@yahoo.com

Muhammad Nadeem Akram Mezan Bank, Quaid-e-Azam Industrial Estate Branch Lahore, Pakistan Tel: 92-331-402-2421 E-mail: nadeemakram@live.com

Received: July 5, 2013 doi:10.5296/ber.v3i2.3958

Accepted: July 18, 2013 URL: http://dx.doi.org/10.5296/ber.v3i2.3958

Abstract The current study aims to find out the determinants significantly affecting the firm’s financial performance in textile sector of Pakistan for the period 2005-2010. The researcher used panel/longitudinal data set which are created with the help of State Bank of Pakistan’s annual publication named as “Financial statement analysis of companies (non-financial) listed in KSE for the period 2005 to 2010 which is available at www.sbp.org.pk online. The researcher used one-way fixed effect model due the presence of cross-sectional fixed effect in the regression
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Business and Economic Research ISSN 2162-4860 2013, Vol. 3, No. 2

results. The dependent variable was profitability as a measure of firm’s financial performance while the independent variables were leverage, growth, firm’s size, risk, tax, tangibility, liquidity and non-debt tax shield. The firm’s performance in textile sector is significantly affected by