Macroeconomic Factors Influencing Market Capitalization of Pakistan Stock Exchange (PSX)

Authors

  • Muhammad Zubair Saeed National College of Business Administration and Economics, Lahore Sub-Campus Multan.
  • Sobia Sultana M.B.A Finance, Department of Business Administration, National College of Business Administration and Economics, Sub Campus Multan, Punjab, Pakistan.
  • Zujaj Ahmed Lecturer & Ph.D. Scholar, Department of Business Administration, National College of Business Administration and Economics, Sub Campus Multan, Punjab, Pakistan.
  • Muhammad Talha Aziz M.Phil. Economics, Department of Economics, Institute of Southern Punjab, Multan, Punjab, Pakistan.
  • Kainat Fatima M.Phil. Scholar, Department of Economics, National College of Business Administration and Economics, Multan, Punjab, Pakistan.

DOI:

https://doi.org/10.56976/rjsi.v5i2.102

Abstract

Stock exchanges worldwide are discovering the best possible outcomes that can increase trading options in financial assets for potential investors. The principal purpose of the study is to provide an efficient and stable picture of market capitalization of Pakistan Stock Exchange (PSX) with various macroeconomic variables, which can be helpful to local and foreign investors. The study analyzed the secondary data from 1992 to 2021. Based on the theoretical background, various diagnostics were applied, precisely (ARDL) Autoregressive Distributed Lag methodology. Empirical outcomes confirmed that hypotheses regarding (FPE) Foreign Portfolio Equity, Inflation, (FDI) Foreign Direct Investment, and (GFCF) Gross Fixed Capital Formation affect market capitalization of PSX with significant positive behavior. Only Exchange Rate has significant negative relationship with PSX market capitalization. This study suggests that PSX-listed companies and policymakers require significant attention to improve their operations and increase the market capitalization of firms to catch the capital from potential investors. The government should watch the exchange rate and inflation-controlling factors for the sustainable development of Pakistan in the long run. However, this study has various limitations, such as limited time, resources, and specific data.

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Published

2023-06-30

How to Cite

Saeed, M. Z., Sultana, S., Ahmed, Z., Aziz, M. T., & Fatima, K. (2023). Macroeconomic Factors Influencing Market Capitalization of Pakistan Stock Exchange (PSX). Research Journal for Societal Issues, 5(2), 303–317. https://doi.org/10.56976/rjsi.v5i2.102

Issue

Vol. 5 No. 2 (2023): RJSI

Section

Articles

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Copyright (c) 2023 Muhammad Zubair Saeed, Sobia Sultana, Zujaj Ahmed, Muhammad Talha Aziz, Kainat Fatima

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This work is licensed under a Creative Commons Attribution 4.0 International License.

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