The Impact of Bank Specific Factors on Investment Decisions

  • Zia Ul Islam
  • Muhammad Muqsit Khan
  • Muhammad Umair
  • Sayyam
Keywords: Investment, Total Assets, Non-Interest Income, Return on Assets, Profit Before Tax, Exchange Rate, Inflation Rate


The main purpose of this study is to analyze the impact of bank specific variables on investment decision
on commercial banks in Pakistan. The data collected from 15 commercial banks was selected from the Pakistan
Stock Exchange. The data of the variables are collected from the secondary sources like from the annual reports and
State Bank of Pakistan website. It covers a period from 2008 to 2018. Result shows that a negative relationship
exists between investment and firm Size, a positive association exists among the investment and return on assets. A
positive weak relation exists between the investment and exchange rate. A negative weak association exists between
investment and Inflation. The findings from this research would provide an understanding of the various decisions to
be made by investors based on the prevailing factors and the eventual outcomes for each decision and would identify
the most influencing factors on the company’s investors’ behavior on how their future policies and strategies will be
affected since investment decisions by the investors will determine the company’s strategy to be applied.