Financial constraints, bank concentration and SMEs: evidence from Pakistan

Abubakr Saeed and Muhammad Sameer

Studies in Economics and Finance, 2015, vol. 32, issue 4, 503-524

Abstract: Purpose - – This paper aims to empirically investigate the impact of bank market concentration of financial constraints on firm investment. Design/methodology/approach - – This analysis is based on cross-industries panel of 368 listed Pakistani non-financial firms over the period of 2001-2009. Further, the Generalized Method of Moments estimation technique has been used to estimate the dynamic panel data model. Findings - – By applying a dynamic panel analysis, it was found that small- and medium-sized enterprises (SMEs) are financially constrained in the credit market. The main finding indicates that reduction in bank concentration eases financing constraints, and this effect is more pronounced for SMEs. In addition, while testing the firm opacity in this context, results reveal that opaque firms are more financially constrained, and bank market competition is less favourable to the firms with greater opacity. Originality/value - – The results, first, assess the efficacy of ongoing financial reforms in Pakistan and, second, offer implications for other economies that exhibit financial development similar to that of Pakistan.

Keywords: Investment; Financial constraints; O12; O16; G21 (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:sefpps:v:32:y:2015:i:4:p:503-524

DOI: 10.1108/SEF-02-2014-0046

Access Statistics for this article

Studies in Economics and Finance is currently edited by Prof Niklas Wagner

More articles in Studies in Economics and Finance from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().