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Purpose of the study: This study aims to investigate the impact of bank-specific and macro-economic factors on commercial banks profitability in Pakistan. Methodology: This study uses both internal and external factors as independent variables. Internal factors are inclusive of capital adequacy, operational efficiency, deposit ratio, liquidity, leverage, number of branches, and bank size, while external indicators are pertaining to GDP, rate of inflation, interest rate, and rate of foreign exchange. Return on assets, return on equity, and net interest margin is employed as proxies for measuring profitability. Balanced panel data of 25 commercial banks over a period ranging from 2009 to 2018 is analyzed through descriptive statistics and fixed effects regression model. Main Findings: The empirical findings revealed that among internal factors, capital adequacy ratio, deposit ratio, leverage ratio, liquidity ratio, and bank size significantly affect the return on asset, while in the case of macro-economic factors, inflation rate, exchange rate, and GDP have a significant impact on return on asset. On the other hand, return on equity is significantly affected by deposit ratio, leverage ratio, and operational efficiency, whereas among macro-economic factors, only the inflation rate had a significant effect on return on equity. Furthermore, in the case of net interest margin, among internal factors, capital adequacy ratio, deposit ratio, bank size, and the number of branches have a significant impact on net interest margin, whereas, among macro-economic factors, interest rate, inflation rate, and exchange rate significantly affected net interest margin. Applications of this study: This study has greater importance for government, bank managers, investors, academicians, and scholars. Originality/Novelty: In this study, the number of branches is taken as a novel factor in Pakistan's case and bridges the gap in the banking literature of Pakistan.

Temperatures worldwide continue to climb, while carbon emissions have exceeded previous records. To achieve environmental sustainability, countries with the Kyoto Protocol and Paris Agreement (COP26) demonstrate sophisticated technical expertise and deploy environmentally driven technologies, such as greenfield investment and renewable energy infrastructure. This proposal presents an intriguing opportunity for policymakers to identify the distinct characteristics of institutional reforms and green energy sources that may be used to mitigate carbon emissions. Governance regulatory factors, foreign direct investment (FDI), renewable energy consumption (REC), research and development expenditures, urbanization, and carbon emissions are examined in Pakistan. The study estimated the short- and long-run association between the variables using the ARDL bounds testing method for 1996Q1 to 2020Q4. In the short run, in terms of carbon emissions and economic output, the country has an upturned cord environmental Kuznets curve (EKC). The race-to-the-bottom concept holds for countries with U-shaped EKCs in the long term. The negative correlation between overseas investment and environmental damage supports the environmental halo hypothesis. Investment in research and technology may reduce emissions, even though urbanization increases them. Future and present REC are often intertwined with carbon footprints. Carbon emissions are also strongly connected with indicators of institutional quality (IQ), such as procedural efficiency, administrative effectiveness, and political unrest. The research findings demonstrated unidirectional Granger causality running from urbanization, government effectiveness, economic growth, and R&D expenditures to carbon emissions to validate urban-led emissions, institutional-led emissions, growth-led emissions, and innovation-led emissions in a country. Furthermore, R&D expenditure Granger causality was linked to inbound FDI, while government effectiveness Granger causality was linked to REC and R&D expenditures. Following the COP26 guidelines for achieving shared prosperity, the study concluded that good governance reforms, R&D expenditures, greenfield investment, and REC promote environmental sustainability and maintain air quality.

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