THE IMPACT OF FIRM GROWTH ON FIRM PERFORMANCE WITH THE MODERATING ROLE OF ECONOMIC POLICY UNCERTAINTY

Abstract

This study explores the relationship between firm growth and firm performance, with a focus on how Economic Policy Uncertainty (EPU) moderates this relationship. The 193 firms that were listed on the Pakistan Stock Exchange between 2017 and 2021 make up the study sample. Additionally the information was taken from the State Bank of Pakistan’s FSA report and the companies’ annual reports. Our major regression method is the OLS model, and the robustness of the primary regression results is checked using FGLS regression. The findings represents that the positive and significant impact of firm growth on performance of the firms. The finding of moderation term has positive and significant impact on firm performance.  Firm growth, whether through increased sales, assets, or market share, is generally seen as a drive of improved performance, helping businesses expand their operations and become more competitive. Firms that grow thoughtfully and uncertainty as an opportunity are more likely to achieve strong performance outcomes, even in challenging environments. Helping firms understand the impact of growth on performance under EPU involves guiding them in strategic planning, risk management, adaptability. Firms that are adept at handling uncertainty can transform obstacles into chances, guaranteeing that their expansion endeavors result in long-lasting and enhanced performance achievements.