Firm level assessment of Pakistan and Malaysia Free Trade Agreement

The core idea of this paper is to assess before and after effect of Pakistan and Malaysia Free Trade Agreement (FTA) on firm level financial factors. The empirical analysis covers the balanced panel data for the period from 2003 to 2014 and uses regression analysis. This study finds that due to chan...

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Bibliographic Details
Published in:Asia Pacific management review 2022-12, Vol.27 (4), p.265-275
Main Authors: Hussain, Ch. Mazhar, Ali Shah, Syed Zulfiqar
Format: Article
Language:English
Subjects:
Cooperation
Developing countries
Economic development
Exports
Firms
Free trade
Free trade agreement
Hypotheses
International trade
LDCs
Leverage and dividend payouts
Literature reviews
Pakistan-Malaysia
Profitability
Prosperity
Tariffs
Trade agreements
Trade liberalization
Trade policy
Trade surplus
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Summary:The core idea of this paper is to assess before and after effect of Pakistan and Malaysia Free Trade Agreement (FTA) on firm level financial factors. The empirical analysis covers the balanced panel data for the period from 2003 to 2014 and uses regression analysis. This study finds that due to change in trade policy, profits decrease, increase in leverage and decline dividend payouts of the firms, which are facing import and export competition. Nonetheless, the firms, which are export oriented and other firms, which enhance their competency by importing latest technology leads toward surge in profits, lower leverage and increase in dividend payments. The contribution of this study is to assist the trade policy makers in formulating the agreements with other ASEAN member countries as well as the corporate managers to make the international trade strategy for the firm to compete in the South East Asian region. To the best of the knowledge, this topic has not been addressed in the literature before.
ISSN:1029-3132
2589-8213
DOI:10.1016/j.apmrv.2021.10.001