Exploring the performance of fertilizer and chemical sector of Pakistan through monetary policy and energy crisis

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.