Abstract:
Purpose. The purpose of this study was to find out the impact of backward integration on
(Profitability, Financial Stability, Business Expansion, Market Competitiveness, Price
Structuring and Sales Growth). This research study aims to investigate role of backward
integration process in textile companies named as Lucky Textile and Gul Ahmed Textile to
explore short term and long-term implication of backward integration in operational
mechanism of the company to compare and contrast pre-and post-operational efficiencies.
Furthermore, this study also investigates necessary fundamental require to co-integrate
production process with backward chain to determine its scope to operation of textile firms in
Pakistan.
Research Method/Sampling: This study comprises of primary data where all responses were
collected by using close-ended questionnaire and the sample size is 400. The technique
selected for this research is Non-Probabilistic Convenience sampling. Data was analyzed
through Bivariate regression statistical technique and Correlation.
Findings: The findings of the research indicate that clearly indicates that there is a significant
impact of backward integration process on profitability of listed firms this is because backward
integration process helps to ensure supply of input and at lower marginal as compare to market
rates therefore results in an increase in net income of firm that comes up with an increase in
profitability , financial health, increase in sales and market enhancement of listed firms.
Practical Implication: Textile industry Pakistan is considered as backbone of
industrialization process in Pakistan. It has sound scope in Pakistan due to availability of raw
material within the country. Furthermore, it is the only industry with largest share in foreign
exchange earnings. It has found that contribution of textile export in total exports of the
country is around 68 percent, it represents 46 percent of total manufacturing activities within
the country. It has share in total GDP of Pakistan around 8.5 percent.
