Firm-specific factors of share prices: an empirical evidence from automobile sector in Pakistan

Abstract

A number of studies have been undertaken to identify the factors affecting share prices in different stock markets, However, the results of past empirical studies to determine the effect on share price were not very conclusive and there were some recent results that seemed to contradict previous studies. The present study seeks to examine the effect of firm-specific determinants of share prices with particular reference to the Non-Financial firms listed in Automobile Sector on Pakistan Stock Exchange (PSX). The study employs a data-set from 15 listed firms belonging to automobile sector on PSX from 2004 to 2017. The data was collected from DataStream, annual reports, State Bank of Pakistan and Pakistan Stock Exchange. This study used unbalanced panel data and statistical analysis techniques like descriptive statistics, correlation matrix and ordinary least square (OLS) regression was tested. The result found that firm-specific determinants (EPS and P/E ratio) have positive significant impact on share price of firm in Pakistan. This study contributes to the current literature and ongoing debate regarding firm-specific factors impacting share price in an emerging market with particular reference to automobile sector in PSX.