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Does firm size matter for the financial constraints?

Ismail , Mohd Adib and Ibrahim, Mansor and Yusoff, Mohammed and Zainal, Mohd-Pisal (2010) Does firm size matter for the financial constraints? Journal Ekonomi Malaysia, 44. pp. 73-81. ISSN 0127-1962

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Abstract

This article empirically investigates the presence of financial constraints in the Malaysian capital market. The existence of financial constraints gives firm less access to external funds to finance their investment activities. Therefore, the constrained firm has to rely on internal sources of financing. The severity of financial constraints is relatively different according to firm size. Hence, the sample is divided into large and small firm subsamples. Using the Q model of investment, the results show that financial constraints are present in the Malaysian market using the full sample. The subsample results however show that large firms are not financially constrained. On the other hand, the smaller firms are facing the constraints in their investment decisions.

Item Type: Article (Journal)
Additional Information: 4178/6367
Uncontrolled Keywords: Financial constraints; investment; cash flow; Q-model; GMM
Subjects: H Social Sciences > HG Finance > HG4001 Financial management. Business finance. Corporation finance.
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button): Kulliyyah of Economics and Management Sciences > Department of Economics
Depositing User: Professor Mohammed Yusoff
Date Deposited: 30 Nov 2011 12:01
Last Modified: 22 Feb 2012 11:35
URI: http://irep.iium.edu.my/id/eprint/6367

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