Testing the impact of external financing on corporate financial constraints in Africa – A case study of Mauritius

Chakeel Coomar Prayagsing and Kheswar Jankee
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Chakeel Coomar Prayagsing: University of Mauritius
Kheswar Jankee: University of Mauritius

Theoretical and Applied Economics, 2016, vol. XXIII, issue Special(I), 122-137

Abstract: By integrating both a deductive approach and a quantitative strategy in a prefinancial crisis environment, this Paper derives a direct measure of Financial Constraint (FC) for Mauritian enterprises. An existing model of FC is augmented and its determinants, including availability of external financing, are modeled and estimated in dynamic frameworks in different heterogeneous corporate samples and internal arrangements. Several robustness tests are conducted and the results confirm that financial sector development reduce the reliance on internal finance and reduce the extent of external FC. Several policies are proposed in light of making external finance more accessible for companies in Mauritius.

Keywords: Financial Constraints; Internal Finance; External Finance. (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:agr:journl:v:xxiii:y:2016:i:special(i):p:122-137

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