Economic Growth, Capital Structure, and Oil & Gas Regulatory Authority (OGRA)

Malik Azhar Hussain, Muhammad Adnan, Muhammad Zubair Saeed, Asma Zafar

Abstract

The petroleum sector is one of the key industries of all the oil exploration economies, including the USA, Saudi Arabia (other Gulf countries), Malaysia, and Pakistan. The petroleum industry has gained importance around the globe due to a huge level of economic support in such industries as power generation, shipping, automobiles, arms & ammunition, and airplanes. This research aims to examine the impact of profitability, growth, and leverage on return on assets (ROA). The main objective of this study is to evaluate how the petroleum industry is fostering the economic growth of Pakistan. The petroleum industry data are collected from all the oil & gas firms listed on the Pakistan Stock Exchange (PSX). The collected data were analyzed using the Panel data regression approach. This study concludes a significant and positive relationship between net profit margin, operating profit margin, and firm performance, whereas leverage and growth harm firm performance. This research is highly effective for oil and gas firms to enhance their performance by maintaining the optimal combination of capital structure and some other firm characteristics. The current study contributes to the capital structure for the oil and gas firms listed on PSX. It also indicates the trends of economic growth and other factors considering capital structure.

 

Keywords: performance, capital structure, net profit, leverage, growth.


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