THE RELATIONSHIP BETWEEN SHARE PRICE AND FIRM SPECIFIC FACTORS: A STUDY ON THE BANKING SECTOR OF BANGLADESH

In this paper, by looking at firm specific factors including book value, profitability, capital ratio and company size for banking firms in Bangladesh, we intend to shed light on possible relationships between firm specific factors and share price in an emerging economy. Our panel data on all public traded bank stocks from the period 2000 to 2015, adjusted for multicollinearity and possible heteroskedasticity, suggests that book value, price-to-earnings ratio and company size have significant relationship with the share price of the concerned banking firms. The study findings are consistent with those of similar studies in other emerging economies and add further evidence to existing literature concerning the relationship between firm specific factors and stock prices in emerging economy capital markets.