The Impact of Macro-Economic Variables on the Stock Market Performance of the Textile Industry With the Moderating Effect of Covid-19: A Comparative Analysis of Pakistan, Bangladesh, and Siri Lanka

Abstract

This study is to examine how macroeconomic variables affect stock market performance of emerging and developing countries namely, Pakistan, Bangladesh, and Sri Lanka. For this purpose, we utilized monthly data on macroeconomic variables and COVID-19 along with the stock market performance of textile sectors of the said countries. Our monthly dataset ranges from December-2019 to January-2022. We employed the Pooled OLS model to analyze the interaction between macroeconomic variables and the stock market performance of textile sectors. Empirical findings of the study suggest that oil prices and covid-19 have a negative significant effect on the stock market performance of textile companies in these countries. On the other large scale manufacturing, which is the measure of industrial production and interest rates has a positive significant effect. Our remaining variables exchange rates and CPI are not significantly affecting the stock market performance of the textile companies during the period. Our empirical findings are very important for policymakers and practitioners to make useful policies.