THE ROLE OF MACROECONOMIC VARIABLES IN SHAPING THE FINANCIAL PERFORMANCE OF FIRMS IN DEVELOPING ECONOMY

Abstract

This study explores how financial performance is affected by macroeconomic factors in India non-financial firms from 2013 to 2022. The World Bank's Development Indicators (WDI) data set and annual reports are the sources of the data. In this research study, the panel data was analyzed using GMM. This research advances the field by using features of macroeconomic variables instead of firm-level elements. The empirical finding demonstrates that macroeconomic factors support non-financial companies' financial performance operating in India. Companies’ operative in India should be concerned of the possible influence of these factors on financial performance and search for new methods to deal with them. The macroeconomic variables effectively enhance financial performance. Policymakers and investors need to take these facts into consideration while choices are being made on economic policy and investments.