Impact of financial liberalization on firm level investment in oil and gas sector of Pakistan

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.