Lease Financing as a Performance Driver: Evidence from Oil and Gas Sector of Pakistan

The sole aim of the study is to analyze the effect of the lease as a potential driver of firm’s financial performance in oil and gas industry of Pakistan. The population for the current research study comprises of 18 listed companies of oil and gas sector of Pakistan but the final sample includes only nine companies which were using lease financing. The data were collected from the annual reports of companies from the year 2013 to 2017. Lease financing is used as an independent variable while firm performance as dependent variable defined by ROA. ordinary least square method was used. The study concludes that financing through the lease is not a significant driver of financial performance in oil and gas companies of Pakistan and also negatively affecting it rather these companies heavily rely on debt financing which decreases their performance. Only the firm size has a positive and significant effect on a firm’s performance in this sector. The policy makers and management should consider lease financing as a potential factor of decreasing the firm performance in oil and gas industry of Pakistan for future consideration. The research study has considerable importance for the oil and gas sector of Pakistan as the first in this domain for the future research, especially for the lease financing