Abstract:
Never lasting political instability and decreasing rates of foreign direct investment (FDI) have
resulted in underdevelopment of Pakistan. Weakness of policies, inefficiency of government
authorities has further led to issues like monetary and real sector gaps, energy crisis and
corruption.
Current study is focused on monetary policies and energy expenses impacting chemical and
fertilizing firms of Pakistan. To measure the impact certain variables are taken into account like
return on equity, earnings per share after tax, return on asset, net profit margin, earnings per
share before tax, earnings per share before tax growth, dividend ratio to equity, kibor, broad
money supply and energy expense. Data collection is from 2000 to 2011.
The statistical results show that firms are adversely affected by increase in energy expense.
However monetary policy has no significant impact on real sector firms.
