The Effect of Political Instability on the Financial Performance of Property and Real Estate Sector Companies Listed on the PSEi Composite for the Period 2001–2024
Keywords:
Financial Performance, Return on Assets, Political Instability, Property Sector, PSEi Composite.Abstract
Political instability is one of the external factors that may affect the institutional environment and corporate financial performance, particularly in the property and real estate sector, which is highly dependent on regulatory certainty and government policies. This study aims to analyze the effect of political instability, proxied by general elections, political coups, political reforms, martial law, and political protests, on corporate financial performance, as measured by Return on Assets (ROA). This study employs a quantitative approach using secondary data obtained from corporate financial statements available in the Osiris database for the 2001–2024 period. The research sample was selected using a purposive sampling technique and consisted of 37 property and real estate companies listed on the PSEi Composite, resulting in a total of 888 observations. The data were analyzed using panel data regression with the assistance of STATA 17 software. Additional analyses were conducted on sub-samples of large and small companies based on firm size. The results indicate that general elections, political reforms, martial law, and political protests have no significant effect on corporate financial performance. However, political coups have a negative effect on corporate financial performance.References
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