Firm Specific Determinants of Growth in a Post CPEC Situation

Purpose: The study explores the determinant of firm growth in a post CPEC scenario by taking a panel data of 53 textile based firms listed on Pakistan Stock Exchange (PSX). Approach/Methodology/Design: The data were extracted from the Financial Statement Analysis (FSA) published by State Bank of Pakistan for a period ranging from 2012 to 2017. In this research, we applied some methods to evaluate results descriptive statistics, correlation analysis and regression models such as random effect model, fixed effect model and pooled OLS and also we use GMM method (generalized method of movement). Findings: The results after the calibration of CPEC as dummy variable proved that profitability and financial leverage are significant determinants of firm growth in the textile sector of Pakistan even after controlling the endogeneity problems. Originality/value: The results imply that the firms in textile sector should focus on sustained profitability and also the availability of healthy financial arrangements to pursue growth in the long term.