Economic freedom and financial performance of microfinance institutions: Asian perspective

Faiza Liaqat, Sadia Farooq, Muhammad Usman, Nasira Perveen and Hafiza Muntaha Khalid

Global Business and Economics Review, 2023, vol. 29, issue 4, 525-542

Abstract: This study aims at examining role of economic freedom in financial performance of Asian based MFIs. We have gathered data from 145 MFIs operating in 19 Asian countries during 2012-2018. Data on economic freedom and MFIs' financial performance have been collected from Heritage Foundation and MIX market respectively. System GMM is employed for data analysis due to endogeneity issues in dynamic panel data. Findings substantiate crucial role of various dimensions of economic freedom in MFIs' financial performance (i.e., business freedom, property rights, investment freedom, financial freedom, and trade freedom). Findings recommend MFIs to consider contextual factors before starting operations in any country, e.g., MFIs may prefer to operate in countries having higher investment freedom, business freedom, and financial freedom.

Keywords: economic freedom; financial performance; microfinance institutions; MFIs; Asia. (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:ids:gbusec:v:29:y:2023:i:4:p:525-542

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