Department of Finance

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Bridging nexus between the financial returns of the film industry and its determinants
(University of Management and Technolog, 2017) Waqar Hassan Randhawa
The purpose of this study is to discern the determinants of the returns of movies in its distinctive genre in context of cinematic factor and financial impact factors. We further tested the adequacy of the current return being a success story in comparison to past. A total of 900 movies sample has been chosen and stratified into equivalent number relating to the old era (1980-2006) and new era (2007-2016). The data demographically relates to the major cities of Pakistan; Lahore, Karachi, Islamabad, Rawalpindi, Peshawar & Quetta. The data is further stratified into Returns (Based upon Box office collection and Investment) and with respect to their perceived determinants, cast, direction, story & Music. We have also tested perceived Financial Determinants (Cast remuneration, variable production cost and promotional expenses). For determining the quantum of returns independent sample T statistics was applied. In order to test the significance of perceived determinants of returns of the movies OLS regression was applied. Our study indicates a surge in returns. Furthermore it reveals that cast and direction are the most significant predictors for the returns, whereas music and story has only shown partial predictability. We have established empirically that for Pakistanfilm industry the financial returns heavily bank on the financial determinants in which more prominently the cast remuneration and the direct variable cost have major to contribute.
Corporate Governance and Earnings Management
(University of Management and Technology, 2018) Mohsin Mumtaz
The research employs fixed effects methodology to examine the impact of corporate governance on earnings management in non-financial firms of KSE 100 index within Pakistanfrom the period 2010 to 2016. Corporate governance mechanisms examined comprise board size, board meetings, audit committee independence, audit committee meetings, big 4 audit firms and managerial ownership. While earnings management is measured through discretionary accruals measured in accordance with the Modified Jones Model (1995). Results of the study indicate that larger board encourages earnings management through increased board diligence appears to have a controlling impact on profits manipulation by management. Further, we find that lower percentage of insider shareholding encourages earnings manipulation. This could stem from the overriding influence of larger block holders and institutional shareholders on the smaller shareholders for the achievement of short term profits by firm leading to earnings management. While more independent members on audit committees encourage earnings manipulation which is in line with the findings related to board size. We also find that more the board members meet, would reduce the earnings management practices. It suggests that board and audit committee members may encourage earnings manipulation from the need to protect their credibility and reputations in the markets by showing robust earnings and firm performance. This is the first study that provides glimpse of the impacts of corporate governance changes in response to the 2012 SECP Code of Corporate Governance, and we contend based our findings that there is a need for tougher legislation, and more elaborate measures with which to assess corporate governance performance within firms.
Does Hot Money Drive Pakistan’s Capital and Real Estate Market? A case from Pakistan
(University of Management & Technology, 2017) Rasheed, Isma
The primary purpose of this study is to examine the impact of hot money on major economic markets of Pakistan such as stock market, and real estate market. Hot money or speculative cash inflow is generally associated with higher volatility. It can create financial bubbles. Particularly in emerging economies, hot money or speculative cash inflows are considered as major influential factor on these major markets. In order to ascertain the evidence of underlying facts we have used hot money as dependent variable and two major economic indicators KSE_100 and Housing price as independent variable. Sharp Ratio and policy rate are taken as control variable. Monthly data is collected from January 2011 to December 2016. To determine the impact of hot money on these economic markets robust time series techniques such as Augmented Dickey-Fuller test, JJ co integration, Granger causality, Impulse response function and Variance decomposition tests are applied. Test results indicate that hot money has marginal influence to explain volatility in real estate and capital market of Pakistan. Our economic conditions affect the behavior pattern of investors. Study results also depict a very little contribution of short term speculative funds for these two markets. The volatility and rise in these two markets may be the cause of GDP growth, bank lending’s, rural-urban migration and urbanization. There might be a functional role of terrorism, peace conditions in Pakistan, political instability; higher level of remittances, family owned business set up of Pakistan can be the reason of marginal influence of hot money in Pakistan.
Dynamism in financing decision patterns: A life cycle approach
(University of Management and Technology Lahore, 2016) Anis, Sumera
This empirical study is conducted to analyse the dynamics of financing decisions for Pakistani non-financial firms. The approach to investigate the problem is life cycle approach incorporating dynamic panel data methodology. Three life cycle stages; growth, maturity and decline are selected for analysis. The basic criteria for samples are information about IPOs. Five hypotheses are postulated for the study which is about life cycle impact, reverse of life cycle impact, reputational effect, in search for reputational effect and pecking order theory. Hypotheses H1a & H1b state that in the beginning firms use more equity finance and then gradually rebalance this with debt. In hypotheses H2a & H2b reverse of H1a & H1b are analysed. In hypothesis H3, as pecking order theory predicts, importance of profitability is considered and utilization of internal finance against debt and equity is studied. Results illustrate that the impact of life cycle theory, reputational effect and pecking order theory are present for Pakistani firms. In the growth stage firms mostly rely upon equity finance and after getting maturity they augment use of debt financing. Pecking order theory is confirmed too.
The effect of concern about reported income on discretionary spending decisions
(University of Management and Technology Lahore, 2016) Abdul Wahid
A lot of research has been conducted in foreign countries on research and development, but in Pakistan a much research well not be conducted in the area of R&D actions through discretionary spending decision. Prior research disclosed the R&D expense through firms SFAS NO. 2 Skaife et al, (2013). In this study under the IAS 38 to highlights the firm’s manager allocate the funds for R&D investment through discretionary spending decisions to improve the firm performance, and was investigated to R&D impact of firm profitability. Researcher for this study was select the sample of 100 firms from non-financial sectors which are listed in Pakistan Stock Exchange. The researcher will use the STATA 12 and MS excel 2013 for statistical analysis. In 1st model researcher was investigated the profitability positive and significant relationship with R&D. Simultaneously R&D effecting of the company profits and growth Branch (1974). It was determine the advertising negative and significant relationship with research and development (R&D).Both advertising and R&D are contributing of the firm future growth Debruine et al, (2011).Firm age is negative and significant relationship existed with R&D. Might to be low support of fund depends upon managerial behavior Branch (1974). Labor intensity strong insignificant and negative relationship with R&D. Labor intensity positive correlated with research and development R&D Narayanan (2015). Multinational affiliation is positive and significant relationship with research and development (R&D). Researcher to check the individual relationship, the profitability and multinational affiliation positively and significant relationship with research and development (R&D). And advertising, firm age and labor intensity is negative and insignificant relationship with R&D. In model 2ndthere is strong relationship and significant between R&D and profitability. Research and development (R&D) strongly impact of profitability within group of companies Sores et al, (2014). Advertising had shown the positive and significant association with R&D. Advertising increase the firm profitability and growth Bhagwat et al, (2011). Firm age is positive and significant relationship existed between firm age and profitability. Labor intensity positive insignificant relationship with profitability. There is positive and insignificant relationship between multinational affiliation and profitability. Scholars are providing a strong evidence labor intensity increase the innovation and profitability activities Suarez et al, (1999). Researcher to check the individual relationship, R&D, firm age and multinational affiliation is positively and significant relationship with profitability. There is positive but insignificant relationship between advertising and profitability. In 3rd model Intangible asset is positive and significant relationship with profitability. Third model shown the positive relationship between intangible asset and profitability Branch (1974). Change in intangible asset is strong negative and insignificant relationship with profitability. Subsidies is an important factor to decrease the cost of capital an increase the R&D investment events. The Korean firms increase the firm productivity and research and development (R&D) expenditures through Government subsidy (Vonortas et al, 2013). Investigate the tax credit to increase the R&D expense (Reenen et al, 2000).The market structure play a vital role in industry growth. The firms in existing market structure rather than other industry structure to increase the profit in R&D investment (Mirman et al, 2003)
Effects of fiscal policy on GDP for the case of Pakistan.
(University of Management and Technology Lahore, 2014) Manal Sharif Bajwa
The Purpose of this paper is to determine the impact of the fiscal policy on GDP in Pakistanusing time series data for the period 1980-2014. Asymmetry in the fiscal policy will be explained by Direct taxes ,indirect taxes, development expenditures and current expenditures. ARDL model is used for the analysis. The outcome supports two key conclusions. Current expenditures and indirect tax do not have asymmetry in their model while development expenditure and direct tax have asymmetry in their model. So the policy makers can see the increasing and decreasing Direct taxes and development expenditures they can make sure that the effect might not be same and opposite. This study will provide help in determining the importance of fiscal policy for the development of Pakistan.
An empirical analysis of banking sector in Pakistan: Islamic versus conventional banks
(UNIVERSITY OF MANAGEMENT AND TECHNOLOGY, 2015) Bushra Shafiq
The purpose of this research study is to determine the impact of service quality being provided by the Islamic and Conventional banks on customer's judgments towards their satisfaction level on different parameters of Islamic banks in the region of Lahore, Pakistan.
Factors affecting children immunization in Lahore
(University of Management and Technology, 2017) Syeda Tahseen Fatima
Immunization is the cost effective way to prevent disease with use of vaccine. In 1974 WHO introduce expanded program of immunization (EPI) to vaccine children throughout the world. Cross sectional study was conducted to contribute information regarding factors effecting immunization in children <3 years of age at Lahore. Immunization coverage is better in Lahore as compare to other cities but still vaccination status of children in Lahore is not 100%. Factors may include poor knowledge about vaccination nearby health care center, vaccination card etc... Interviews were conducted specifically designed questionnaire with question about reasons of poor immunization status among children. Analysis included descriptive and cluster analysis is used. Two clusters were formed, in cluster 1, Parents had illiterate (Mother 96.8% & Father 48.5%). 92.5% parents had knowledge about vaccination. In cluster 2, Parents had also illiterate (Mother 96.8% % Father 64.8. The application of Health facility by the population of Lahore is better. In immunization status is not up to the target and various determinants are attached with the poor immunization status. If those determinants for vaccination were escaped, the coverage of vaccine could easily reach national targets. Access to nearby health care facility, parental educational levels, socioeconomic status, and knowledge about the vaccination can contribute to the better immunization status in Lahore.
Factors determining the selection of captial budgeting techniques
(University of Management and Technology, 2014) Farrukh Ijaz
Purpose: The main purpose of this research study is to determine the factors that play an important role in the selection of a particular capital budgeting techniques. The study determines the factors that an investor considers significant in the selection of capital budgeting techniques. Methodology/Design/Approach: A primary data based study of 92 firms has been conducted to find the determinants of capital budgeting techniques selection while considering financial and non financial factors. The financial factors include company size, growth rate and capital expenditure, whereas non financial factors include project life, industry, management demographics, competition in the industry, environmental uncertainty and risk. Findings: The study concludes that firm’s decision maker’s considers both financial and non financial factors (except leverage level and company age) while selecting capital budgeting technique. Small firms usually rely on a one capital budgeting technique and therefore, mostly don’t consider the non-financial factors like company age, competition and demographics. Research Limitations: The study takes the data of the listed and non-listed companies that are operating and having their offices in the region of Lahore. Managerial Implications: The study assist investor’s and decision making authorities of domestic and international firms to have a better look of taking capital budgeting decisions. This research also enables a broad and rich overview of capital budgeting techniques used for investment projects within the Pakistan. Originality/Value: Most of the operational issues and factors of capital budgeting methods leading to its long term sustainability and selection are brought under discussion. First comprehensive study has been conducted on factors determines the selection of capital budgeting techniques within the Pakistan.
The Financial And Intellectual Capital Structure’s Implication Of Pursuing a Strategy of Innovation
(University of Management & Technology, 2018) Muhammad Ali Sikander
Recently the experimental effort has protracted the variety of approaches interrelated with Leverage and make a sound strategy to find the relation of company innovation with Leverage. The firm that recently established in the market is highly dependent on the innovation and the competition in the market requires a solid innovation strategy to sustain in the market. Therefore, innovation importance can't be neglected at any phase of business life. At the same time, employees also play a major role to identify the best strategy that can increase company innovation as well as their performance. The key complication that a company faces today is innovation is highly interconnected with the Leverage of the firm. The modern studies show that more the company's managers are vigilant by setting their capital structure the more innovation business will produce so human capital play a vital role to implement strong innovation strategy. The financial slack of a company highly emphasizes on the firm's innovation. Our research is to find out the relationship of innovation with capital strategy. However, innovations affect intellectual capital while observing the impact on company's profitability. Therefore, this Research study is the illumination on innovation impacts on company capital structure and intellectual capital that company either invests owner equity or takes debts to boost innovation. We take 100 innovative companies from Forbes innovative firms as our sample and drive R&D intensity ratio (research and development) as substitute of innovation and applied regression by taking dependency of these companies on Leverage ratio and Intellectual Capital. This Research Study will help entrepreneurs to jump into the market with some logical thinking and this model will guide that how the market's most innovative firms are acting. This Research Study shows a strong response that a company financial strategy is an important part of the company to create innovation.
Financial leverage and investment pattern in capital expenditure A case of non-financial companies of SAARC countries
(UNIVERSITY OF MANAGEMENT AND TECHNOLOGY, 2015) Muhammad Mukarrum
This thesis was aimed to test the investment pattern for non-financial companies of SAARC Countries. For this purpose five SAARC countries were taken including; Pakistan, India, Bangladesh, Sri Lanka and Maldives. Other SAARC countries were not included because of unavailability of the data. In this study two type of leverage were used; one is Total Debts divided by Total Assets and second is Long Term Debts divided by Total Assets. This Study applies Linear Regression and Generalized Least Square Method (GLS). In Linear Regression there was a problem of heteroscedasticity in the data. So GLS was applied to see the unbiased results. This study gives three important findings; first individual countries companies' data was analyzed. Secondly the comparative analysis was applied among five SAARC countries' companies. Thirdly investment pattern was analyzed with low growth and high growth firms for selected five countries. It was found that leverage one (Total Debts/ Total Assets) is negatively influencing to investment in case of Pakistan& India but in case of Sri Lanka, Bangladesh and Maldives leverage one is positively influencing. The second type of leverage (Long Term Debts/Total Assets) is influencing negatively to investment in all selected countries except for Bangladesh in which leverage two is positively influencing. For low growth and high growth firms the influence of leverage is different for different countries.
Financial performance of public & private sector banks of Pakistan: “A comparative analysis
(UNIVERSITY OF MANAGEMENT AND TECHNOLOGY, 2015) Abdullah Imtiaz
This study empirically tries to find out the effect of bank specific factors on banks performance of Pakistani banks and how their performance is different from each other? To achieve this purpose the panel data of 19 (15 private & 4 National Commercial ) banks have been selected as a sample form the year ended 2009 – 2014 on quarterly bases by applying one of the most important technique GMM estimation approach proposed by Arellano and Bond (1991) using E views. The bank specific variables included net NIM, DTAR, CTIR, CAR, SIZE and ATDR. ROA and ROE were used as profitability measures.
Financial risks in banking sector of Pakistan
(University of Management and Technology Lahore, 2017) Muaaz Ahmad, Hafiz
Banking industry plays a vital role in economic performance of every country. Banks used to generate its profit by taking loans from one party with the lower interest rates and lend it to the other party with the higher interest rates, the difference between these interest rates are basically the profit of banks but this process of generating income is not as smooth as it looks like. Banks has to face lots of threats which are known as financial risks. This study covers all the financial risk which includes market risk, credit risk, liquidity risk, rate of return risk, interest rate risk and equity risk for Islamic banks and conventional banking sector prevailing in Pakistan. This comparative study investigates the different determinants of all type of risks and the level of financial risks prevailing in banking industry. Furthermore, it examines which banking sector (Islamic or Conventional) is more sensitive to the underlined risks. The aim of this study is to examine that up to what extent Pakistani banks are affected by financial risks and to compare the all financial risks that what type of risks are more harmful for Islamic banks and what type of risks are more hazardous for the conventional banks. Secondary data is being used in this study and it is collected from annual reports, SBP web site and from different articles from 2002 to 2016. Total 10 banks are being undertaken in this study as a sample in which 5 banks are Islamic and 5 are conventional. Regression model is used in this research and Descriptive Analysis, Fixed and Random Effect, Hausman Test are the techniques which has been used with the help of E-views and MS Excel. The results depict that Islamic banks are more sensitive to liquidity risk and credit risk as compare to the conventional banks. In case of market risk, both sectors are facing approximately the same level of risk. Conventional banks are more sensitive to equity risk, interest rate risk and rate of return risk.
Foreign direct investment and its causal relationship with economic growth, human resource development, economic competitiveness and corruption: SAARC countries
(UNIVERSITY OF MANAGEMENT AND TECHNOLOGY, 2015) Mohyuddin Tahir Mahmood
This research indicated the foreign direct investment inward in SAARC region and then studied the causal relationship of FDI inward with the three different indexes (i.e human development index, competitive index and corruption index) and also investigated the impact of FDI inward on economic growth. The main focus of this thesis is SAARC member states. Panel data was used as sample data that consists of observations from a number of countries in time series manner. Five countries (Pakistan, Nepal, Sri-Lanka, India and Bangladesh) from South Asian Association for Regional Cooperation covering period of 1995-2012 were selected. Fixed effect and random effect models were used for data analyses to draw conclusions. Economic competitiveness had strong negative relationship with foreign direct investment. Corruption showed negative strong relationship with foreign direct investment. Human resource development has a positive relationship with foreign direct investment inward. Foreign direct investment inward has a negative effect on the economic growth but the coefficient value 7.75E-11 shows this effect is so minor that it can be considered as no effect.
Impact of bank’s structural determinants on banks’ performance: A case study of Pakistan
(UNIVERSITY OF MANAGEMENT AND TECHNOLOGY, 2015) Maqsood, Nazik
Purpose/objective: The purpose of conducting this study is to examine the impact of structural determinants on the smaller and larger banks’ performance and to make the comparative analysis of banks’ performance. Design/approach/ methodology:To examine the impact of structural determinants on banks’ performance, bank size (lnTA), liquidity (DEPTA), asset composition (LTA), capital adequacy (CAR), cost management (OCTA), credit risk (LLPTL), productivity (NIETA), efficiency (IELF) are taken as explanatory variables and performance measure (ROAA) is used as dependent variable. To investigate the impact ofstructural determinants on performance of banks, sample for 7 large banksand 7 small banks is taken from the conventional banks of Pakistan for fourteen years during the period 2001 to 2014. Panel data is used to conduct the analysis. Ordinary least square method, fixed and random effect regression techniques are applied on data.
The Impact of Credit Rating on Firm Performance and Stock Return; Evidence from Pakistan
(University of Management and Technology Lahore, 2016) Abbas, Muhammad Ahmad
The respective study focus on three aspects; factors determining credit rating, the impact of CR on act of firm & the relation between return of stocks and credit rating. The study focuses on the firms listed in Karachi Stock Exchange (KSE) of Pakistan. The empirical analysis uses the data of 49 firms rated by Pakistan Credit Rating Agency (PACRA) for the time period of 6 years, 2009-2014. Two estimation techniques have been applied, Ordered Probit Model and Panel data Regression. Our findings illustrate credit ratings are predicted by important firm specific factors (size, growth opportunities and capital intensity, asset returns, sector type). Moreover, it is suggested further that firm with higher credit rating tend to have better performance (measured byTobin’s Q& ROA) of listed firms. Likewise, higher rated firms tend to achieve higher returns on their stocks.
Impact of CSR on financial performance
(University of Management and Technology Lahore, 2017) Haq Nawaz
This study intends to explore the relation between the practices of Corporate Social Responsibility (CSR) and the financial performance of banks using the measure of ROA. This research helps to improve the knowledge and managerial practices. The current study uses Pakistan's banking industry as the empirical setting. The methodology of the study is based on the creation of a 32-item scale CSR disclosure index to measure CSR and then regression results are applied on the models. The results concluded that all Banks in Pakistanview CSR practices as strategic activity and are included in the annual reports of banks. Moreover, there exist significant relationship between customer related CSR and financial performance (ROA) and insignificant association between employees related CSR, stakeholders related CSR and CSR in totality and financial performance (ROA).Future research can investigate the effect of CSR on other factors like knowledge and talent management, human capital development etc. Furthermore, other developing countries can be taken in the study for the investigation of CSR.
Impact of internal mechanism of corporate governance on firm performance: industry-wise empirical analysis
(University of Management and Technology, 2015) Sabahat Riaz
ABSTRACT The present study investigates the impact of some of the variables of corporate governance on firm performance. Main purpose of the study is to investigate whether corporate governance vary from sector to sector because overall results seem to be misleading on the premise that industrial norms vary from sector to sector and even firm to firm within same sector. For this purpose, a sample of 50% firms has been chosen randomly from top non-financial seven sectors of Pakistanfor the years from 2008 to 2014. These sectors have significant role in KSE-100 index fluctuation. Dependent variable is firm performance measured as ROA, ROE and Tobin Q whereas independent variables of corporate governance include Board Size, Board Composition, CEO Compensation and Ownership Concentration. Overall descriptive statistics show that highest board size is 16 with minimum of 7. Board size ranges from 8 to 16 in different sectors. There are certain firms in different sectors where leverage is zero and CEOs do not draw compensation.
Impact of macroeconomic variables on stock market indices: Evidence from SAARC countries
(UNIVERSITY OF MANAGEMENT AND TECHNOLOGY, 2015) Saman Rubab
Purpose − Present study seeks to investigate the impact of macroeconomic variables on stock market indices in case of SAARC countries. Design /Approach/Methodology − Data for dependent variable (stock market index) and independent variables (money supply, inflation, interest rate, gross domestic product, exchange rate and foreign direct investment) is collected covering time period from 1995 to 2014. Ordinary least square regression, fixed effect and random effect techniques are used to examine the impact of macroeconomic variables on stock market indices in case of SAARC countries.
Impact of paternalistic leadership on higher education institutes effectiveness: mediating role of organizational citizenship behavior
(University of Management and Technology, 2015) Maham Shahid
The study has aimed at examining the impact of organizational citizenship behavior of university teachers as a possible mediator between paternalistic leadership style of supervisors and overall effectiveness of the educational institute. Since, Pakistanis a developing county, and to advance towards a developed country, education needs to be in major and vital focus. Top 10 universities, chosen from the Higher Education Commission of Pakistan's current list, were investigated.Positivist approach is used for the study as it aimed at fact based analysis. Questionnaire (carrying 46 questions: 12 for PL, 4 for OCB and 30 for OE) was administered by adopting measures already used in different studies for respective variables. Pal Scale was distributed to the faculty members of the universities (N=322), reporting about their supervisor's leadership style. Moreover, employees were told to address about their extra-role behavior, i.e. organizational citizenship behavior, by using the scale developed by Welbourne, Johnson and Erez. In addition to this, employees evaluated the overall effectiveness by using the organizational effectiveness scale for Higher Education Institutes of Kwan and Walker.

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