Abstract:
The available research literature on stock performance has primarily stressed the importance of asset price theories, macroeconomic and microeconomic, and institutional differences. However, there is still an open question: Are there any other factors those influence stock performance? This research aims to answer this question by providing new insights into industry factors along with country-level and firm-specific factors in conjunction with the stock performance of the non-financial sector firms listed at the Pakistan Stock Exchange. The study provides new insights into the prevailing research literature by considering an emerging economy, Pakistan. We find that non-financial sector firms are heterogeneous, suggesting applying a fixed effect approach for reliable estimation. To investigate the issue, data from 80 companies spanning 17 years (2004-2020) were analyzed with a fixed-effect model. Our study results revealed that firm tangibility, munificence, gross domestic product, inflation and money supply have negative, while size, growth, dynamism, Herfindahl-Hirschman index, exchange rate and oil prices have a positive relationship with financial performance. The results are robust under alternative estimation approaches and offer useful policy implications.