Effect of Investment, Financing and Dividend Decisions on Firm Value: Evidence From Listed Firms of Construction Industry of Pakistan

Abstract

This study explores the effects of investment, financing and dividend decisions, listed firm related with construction sector of Pakistan. For this objective, data of 19 listed firms for the time period of 2011-2020 utilized. OLS regression method is used for estimation. Results indicate that investment decision has insignificant & negative effect on firm value of construction sector of Pakistan. This finding may suggest that persistent of inefficiencies of selecting high return projects or delaying which is common in capital sensitive sectors. Financing and dividend decisions have positive and significant effect on firm value of construction sector of Pakistan. These findings suggest that management of the construction listed firms of Pakistan, are using financing and dividend as signal for market. This study provides valuable insight in the field of corporate finance, providing the real-world evidence from the context of investment, financing, and dividend decisions impact on the value of firms in Pakistan’s construction sector. On a practical note, this study delivers important insights for corporate managers, investors, and policymakers, helping them develop well-rounded financial strategies that enhance market confidence, improve capital allocation efficiency, and foster long-term value creation in the construction industry.