Thresholds in the nexus between financial deepening and firm performance: Evidence from Indonesia
Irwan Trinugroho and
Bruno S. Sergi
Global Finance Journal, 2019, vol. 40, issue C, 1-12
Using a survey of 41,862 manufacturing firms in Indonesia from 2004 through 2013, this study documents that firms in provinces with deeper financial infrastructure exhibit better performance in general; but this is true especially for firms with higher financial constraints (measured by a low-intensity use of fixed capital), and only when financial depth at the province level already exceeds a certain level. That is, this paper documents the presence of firm-level and province-level thresholds in the nexus between financial deepening and firm performance. It is important to consider such conditioning factors, in addition to boosting financial development, in order to improve manufacturing firms' performance and thus industrialization in Indonesia.
Keywords: Financial deepening; Threshold effects; Firm performance (search for similar items in EconPapers)
JEL-codes: O16 G21 G28 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:glofin:v:40:y:2019:i:c:p:1-12
Access Statistics for this article
Global Finance Journal is currently edited by Manuchehr Shahrokhi
More articles in Global Finance Journal from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().