IMPACT OF WORKERS’ REMITTANCES ON CORPORATE INVESTMENT EFFICIENCY: EVIDENCE FROM LISTED FIRMS IN PAKISTAN

Abstract

This study examined the impact of workers’ remittances on corporate investment efficiency among non-financial listed firms in Pakistan. The study aimed to investigate whether remittance inflows improve firms’ investment decisions, financial flexibility, and productive investment activities. A quantitative longitudinal research design was adopted using panel data collected from 180 non-financial firms listed on the Pakistan Stock Exchange over the period 2015–2024. Secondary data were obtained from firms’ annual reports, the State Bank of Pakistan, and the World Bank database. Descriptive statistics, correlation analysis, and fixed effect panel regression analysis were employed to analyze the data. The findings revealed that workers’ remittances positively and significantly influenced corporate investment efficiency by improving liquidity conditions and reducing financing constraints. Profitability, cash flow, and growth opportunities also positively affected investment efficiency, whereas leverage negatively influenced firms’ investment decisions. The study contributes to corporate finance literature by providing empirical evidence from an emerging economy context.

Keywords:  Corporate Finance, Corporate Investment Efficiency, Financing Constraints, Listed Firms, Pakistan, Workers’ Remittances