energy crisis and effect on ROA
ENERGY CRISIS AND EFFECT ON ROA: AN EMPIRICAL STUDY
Abstracts:
This study investigates the impact of Energy crisis on the financial performance of the different industries in Pakistan. In the study Performance has been measured by Return on Assets ratio (ROA).Performance of all the KSE listed companies from five major industries of Pakistan has been observed for the period of six years (2004 to 2009). For Descriptive and paired sample mean comparison, sample has divided into two, pre and post energy crisis. Results of the study suggested that performance of the companies have decreased significantly because of energy crisis in Pakistan. Industry wise analysis revealed that Textile, Cement and Engineering Industries badly affected by energy crisis. However impact of these crises on Sugar and Chemical industry is insignificant.
Key Words:Energy Crisis, Performance of Industry, Pakistan
Introduction:
Energy is considered to be the lifeline for every economy around the globe, and it is considered the most important component in the course of development (Sahir and Qurashi, 2007)whether it is agriculture or industry, energy is an essential component to move forward. Socially it represents the class of life of citizens and community and economically it is important for every industry. Traditional theories of economics consider just capital and labor as the most important factors of production(Stern Cleveland, 2004). But it is no more the case in current scenario, recent studies have suggested that energy is the most important component in the production and consumption function of every economy in the world(IEA, 2005). Lot of work has done in the recent years and it has been proved that energy is the essential component in the growth of economy because of its complementary part in production (for example, Asafu-Adjaye, 2000;Stern,2000;ShiuandLam,2004;Altinayand Karagol, 2005;Lee,2005).
The relationship of energy consumption and economic growth has
Abstracts:
This study investigates the impact of Energy crisis on the financial performance of the different industries in Pakistan. In the study Performance has been measured by Return on Assets ratio (ROA).Performance of all the KSE listed companies from five major industries of Pakistan has been observed for the period of six years (2004 to 2009). For Descriptive and paired sample mean comparison, sample has divided into two, pre and post energy crisis. Results of the study suggested that performance of the companies have decreased significantly because of energy crisis in Pakistan. Industry wise analysis revealed that Textile, Cement and Engineering Industries badly affected by energy crisis. However impact of these crises on Sugar and Chemical industry is insignificant.
Key Words:Energy Crisis, Performance of Industry, Pakistan
Introduction:
Energy is considered to be the lifeline for every economy around the globe, and it is considered the most important component in the course of development (Sahir and Qurashi, 2007)whether it is agriculture or industry, energy is an essential component to move forward. Socially it represents the class of life of citizens and community and economically it is important for every industry. Traditional theories of economics consider just capital and labor as the most important factors of production(Stern Cleveland, 2004). But it is no more the case in current scenario, recent studies have suggested that energy is the most important component in the production and consumption function of every economy in the world(IEA, 2005). Lot of work has done in the recent years and it has been proved that energy is the essential component in the growth of economy because of its complementary part in production (for example, Asafu-Adjaye, 2000;Stern,2000;ShiuandLam,2004;Altinayand Karagol, 2005;Lee,2005).
The relationship of energy consumption and economic growth has
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