Financial constraints and firm investment in Malaysia: an investigation of investment-cash flow relationship
This paper investigates the presence of financial constraints among firms in Malaysia using firm level panel data analysis. The empirical results based on panel GMM demonstrate that financial constraints are present in the market, which indicate that the firms are unable to access to external forms...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Faculty of Economics and Management, Universiti Putra Malaysia
2010
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| Online Access: | http://psasir.upm.edu.my/id/eprint/39472/ http://psasir.upm.edu.my/id/eprint/39472/1/39472.pdf |
| _version_ | 1848849152081920000 |
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| author | Ismail, Mohd Adib Ibrahim, Mansor Yusoff, Mohammed Zainal, Mohd Pisal |
| author_facet | Ismail, Mohd Adib Ibrahim, Mansor Yusoff, Mohammed Zainal, Mohd Pisal |
| author_sort | Ismail, Mohd Adib |
| building | UPM Institutional Repository |
| collection | Online Access |
| description | This paper investigates the presence of financial constraints among firms in Malaysia using firm level panel data analysis. The empirical results based on panel GMM demonstrate that financial constraints are present in the market, which indicate that the firms are unable to access to external forms of financing. In addition, the presence also signifies the presence of asymmetric information problem between the firm and its financer. Thus, the neoclassical investment theory which based on assumption of complete information such that only factor prices and technology determine firm’s desired capital stock is simply rejected. Eventually, their investments are much affected by fluctuations in their cash flows or retained earnings. |
| first_indexed | 2025-11-15T09:45:51Z |
| format | Article |
| id | upm-39472 |
| institution | Universiti Putra Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T09:45:51Z |
| publishDate | 2010 |
| publisher | Faculty of Economics and Management, Universiti Putra Malaysia |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | upm-394722016-01-12T07:55:42Z http://psasir.upm.edu.my/id/eprint/39472/ Financial constraints and firm investment in Malaysia: an investigation of investment-cash flow relationship Ismail, Mohd Adib Ibrahim, Mansor Yusoff, Mohammed Zainal, Mohd Pisal This paper investigates the presence of financial constraints among firms in Malaysia using firm level panel data analysis. The empirical results based on panel GMM demonstrate that financial constraints are present in the market, which indicate that the firms are unable to access to external forms of financing. In addition, the presence also signifies the presence of asymmetric information problem between the firm and its financer. Thus, the neoclassical investment theory which based on assumption of complete information such that only factor prices and technology determine firm’s desired capital stock is simply rejected. Eventually, their investments are much affected by fluctuations in their cash flows or retained earnings. Faculty of Economics and Management, Universiti Putra Malaysia 2010-06 Article PeerReviewed application/pdf en http://psasir.upm.edu.my/id/eprint/39472/1/39472.pdf Ismail, Mohd Adib and Ibrahim, Mansor and Yusoff, Mohammed and Zainal, Mohd Pisal (2010) Financial constraints and firm investment in Malaysia: an investigation of investment-cash flow relationship. International Journal of Economics and Management, 4 (1). pp. 29-44. ISSN 1823-836X http://econ.upm.edu.my/ijem/vol4no1/bab02.pdf |
| spellingShingle | Ismail, Mohd Adib Ibrahim, Mansor Yusoff, Mohammed Zainal, Mohd Pisal Financial constraints and firm investment in Malaysia: an investigation of investment-cash flow relationship |
| title | Financial constraints and firm investment in Malaysia: an investigation of investment-cash flow relationship |
| title_full | Financial constraints and firm investment in Malaysia: an investigation of investment-cash flow relationship |
| title_fullStr | Financial constraints and firm investment in Malaysia: an investigation of investment-cash flow relationship |
| title_full_unstemmed | Financial constraints and firm investment in Malaysia: an investigation of investment-cash flow relationship |
| title_short | Financial constraints and firm investment in Malaysia: an investigation of investment-cash flow relationship |
| title_sort | financial constraints and firm investment in malaysia: an investigation of investment-cash flow relationship |
| url | http://psasir.upm.edu.my/id/eprint/39472/ http://psasir.upm.edu.my/id/eprint/39472/ http://psasir.upm.edu.my/id/eprint/39472/1/39472.pdf |