Determinants of Firm Value: Evidence from Cement Sector of Pakistan

Abstract

The study's objective is to calculate and assess the impact of Company Size, Leverage, Dividend Policy, Profitability, and Growth on Firm Value in the Pakistan Stock Exchange's cement industry. Data for all listed cement companies is gathered from State Bank of Pakistan publications and Annual Reports of the companies from 2012 to 2021 on the Pakistan Stock Exchange website. This study takes a quantitative approach, employing purposive sampling procedures to measure 13 firms as research object. The data is analyzed using panel data regression. The random effect regression model is based on the Hausman specification test. The study uses firm specific factors to explain the variation in firm value. The finding shows that Firm Size and Profitability have significant positive impact on firm value, whereas the leverage, dividend policy and firm growth has insignificant effect on firm value. The findings concluded that model explains 43.25% variation in dependent variable. The sample of cement sector is used to evaluate the factors which determine the firm value and we have used one market measure to gauge the firm value. The findings of study can be used by financial manager to manage firm specific factors for the maximization of firm value. The study has included the cement sector in the analysis which is untapped sector in previous studies