Abstract:
Study demonstrates the effect of financial liberalization on firm interest in
Oil and gas sector of Pakistan. Financial liberalization is the financial changes which
have been embraced in this study to create financial liberalization, keeping firm size
as control variable. In light of past studies I utilized distinctive intermediary measures
to quantify the effect of financial liberalization and to create financial liberalization
Index. Writing from past studies demonstrates that financial liberalization has
demonstrated negative impact with reference to firm size. In perspective of past
writing financial liberalization has indicated inconsequential effect on firm
investment. As this study, likewise infers that financial liberalization has
demonstrated consequential effect on firm venture with reference to oil and gas firms
of Pakistan. Information assembled comprise of all Oil and gas firms registered on
Karachi Stock Exchange from 2000 till 2013 sample consists of 11 firms and data
used is panel data. In this study, PCM (Principle Component Model) and GMM
(Generalized Method of Movements) are used for estimation of financial
liberalization index and observe its effects on firms investment.
