Does Firm Size Matter for the Financial Constraints?

Mohd Adib Ismail (), Mansor Ibrahim, Mohammed Yusoff and Mohd Zainal
Additional contact information
Mohd Adib Ismail: Pusat Pengajian Ekonomi Fakulti Ekonomi dan Pengurusan Universiti Kebangsaan Malaysia 43600 UKM Bangi, Selangor D.E.
Mohammed Yusoff: Islamic International University of Malaysia
Mohd Zainal: International Centre for Education in Islamic Finance (INCEIF)

Jurnal Ekonomi Malaysia, 2010, vol. 44, 73-81

Abstract: This article empirically investigates the presence of financial constraints in the Malaysian capital market. The existence of financial constraints gives firm less access to external funds to finance their investment activities. Therefore, the constrained firm has to rely on internal sources of financing. The severity of financial constraints is relatively different according to firm size. Hence, the sample is divided into large and small firm subsamples. Using the Q model of investment, the results show that financial constraints are present in the Malaysian market using the full sample. The subsample results however show that large firms are not financially constrained. On the other hand, the smaller firms are facing the constraints in their investment decisions.

Keywords: GMM.; Q-model; cash flow; financial constraints; investment (search for similar items in EconPapers)
Date: 2010
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.ukm.my/jem/wp-content/uploads/2021/06/jeko_44-7.pdf (application/pdf)

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:ukm:jlekon:v:44:y:2010:i::p:73-81

Access Statistics for this article

More articles in Jurnal Ekonomi Malaysia from Faculty of Economics and Business, Universiti Kebangsaan Malaysia Contact information at EDIRC.
Bibliographic data for series maintained by Muhammad Asri Abd Ghani ().