Systematic And Un-Systematic Factors Influencing Profitability In The Energy Sector Of Pakistan

Abstract

The purpose of the study is to investigate the Micro and Macro Dynamics that affect
the energy sector during the study period of 2018-2023 by using the most reliable
models of the panel data analysis. The factors of financial leverage and age are
positive while liquidity, risk, GDP, growth, and size significantly affect financial
Performance. Moreover, tangibility, market share, interest rate, and inflation rate
have insignificant impacts on return on assets (ROA).On the other hand, analyze
the influence of factors that determine financial performance on return on equity
(ROE).Financial leverage, growth, risk, tangibility, liquidity, GDP, and INF are
positive and significantly related, while risk, tangibility, and INF have an
insignificant influence on ROE. Thus. ROE is significantly and positively influenced
by financial leverage, growth, liquidity, and GDP. The factors of size, age, market
share, and interest rate are not statistically significantly related to return on equity
(ROE). The energy should be focused on internal factors that will enhance the
efficiency of the industry by providing valuable services. It also recommended that
systematic factors must be considered while making major decisions.