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Financial constraints and firm investment in Malaysia: an investigation of investment-cash flow relationship

This paper investigates the presence of financial constraints among firms in Malaysia using firm level panel data analysis. The empirical results based on panel GMM demonstrate that financial constraints are present in the market, which indicate that the firms are unable to access to external forms...

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Main Authors: Ismail, Mohd Adib, Ibrahim, Mansor, Yusoff, Mohammed, Zainal, Mohd-Pisal
Format: Article
Language:English
Published: The UPM Press 2010
Subjects:
HG4001 Financial management. Business finance. Corporation finance.
Online Access:http://irep.iium.edu.my/1742/1/Financial_Constraints_and_Firm_Investment.pdf
http://irep.iium.edu.my/1742/
http://www.econ.upm.edu.my/ijem/vol4no1/bab02.pdf
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spelling my.iium.irep.17422021-07-03T15:59:30Z http://irep.iium.edu.my/1742/ Financial constraints and firm investment in Malaysia: an investigation of investment-cash flow relationship Ismail, Mohd Adib Ibrahim, Mansor Yusoff, Mohammed Zainal, Mohd-Pisal HG4001 Financial management. Business finance. Corporation finance. This paper investigates the presence of financial constraints among firms in Malaysia using firm level panel data analysis. The empirical results based on panel GMM demonstrate that financial constraints are present in the market, which indicate that the firms are unable to access to external forms of financing. In addition, the presence also signifies the presence of asymmetric information problem between the firm and its financer. Thus, the neoclassical investment theory which based on assumption of complete information such that only factor prices and technology determine firm’s desired capital stock is simply rejected. Eventually, their investments are much affected by fluctuations in their cash flows or retained earnings. The UPM Press 2010 Article PeerReviewed application/pdf en http://irep.iium.edu.my/1742/1/Financial_Constraints_and_Firm_Investment.pdf Ismail, Mohd Adib and Ibrahim, Mansor and Yusoff, Mohammed and Zainal, Mohd-Pisal (2010) Financial constraints and firm investment in Malaysia: an investigation of investment-cash flow relationship. International Journal of Economics and Management, 4 (1). pp. 29-44. ISSN 1823 - 836X http://www.econ.upm.edu.my/ijem/vol4no1/bab02.pdf
institution Universiti Islam Antarabangsa Malaysia
building IIUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider International Islamic University Malaysia
content_source IIUM Repository (IREP)
url_provider http://irep.iium.edu.my/
language English
topic HG4001 Financial management. Business finance. Corporation finance.
spellingShingle HG4001 Financial management. Business finance. Corporation finance.
Ismail, Mohd Adib
Ibrahim, Mansor
Yusoff, Mohammed
Zainal, Mohd-Pisal
Financial constraints and firm investment in Malaysia: an investigation of investment-cash flow relationship
description This paper investigates the presence of financial constraints among firms in Malaysia using firm level panel data analysis. The empirical results based on panel GMM demonstrate that financial constraints are present in the market, which indicate that the firms are unable to access to external forms of financing. In addition, the presence also signifies the presence of asymmetric information problem between the firm and its financer. Thus, the neoclassical investment theory which based on assumption of complete information such that only factor prices and technology determine firm’s desired capital stock is simply rejected. Eventually, their investments are much affected by fluctuations in their cash flows or retained earnings.
format Article
author Ismail, Mohd Adib
Ibrahim, Mansor
Yusoff, Mohammed
Zainal, Mohd-Pisal
author_facet Ismail, Mohd Adib
Ibrahim, Mansor
Yusoff, Mohammed
Zainal, Mohd-Pisal
author_sort Ismail, Mohd Adib
title Financial constraints and firm investment in Malaysia: an investigation of investment-cash flow relationship
title_short Financial constraints and firm investment in Malaysia: an investigation of investment-cash flow relationship
title_full Financial constraints and firm investment in Malaysia: an investigation of investment-cash flow relationship
title_fullStr Financial constraints and firm investment in Malaysia: an investigation of investment-cash flow relationship
title_full_unstemmed Financial constraints and firm investment in Malaysia: an investigation of investment-cash flow relationship
title_sort financial constraints and firm investment in malaysia: an investigation of investment-cash flow relationship
publisher The UPM Press
publishDate 2010
url http://irep.iium.edu.my/1742/1/Financial_Constraints_and_Firm_Investment.pdf
http://irep.iium.edu.my/1742/
http://www.econ.upm.edu.my/ijem/vol4no1/bab02.pdf
_version_ 1705056441139724288
score 13.211869

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