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Jurnal Ekonomi Malaysia

44 2010 73 – 81

Does Firm Size Matter for the Financial Constraints?
Adakah Saiz Firma Penting Kepada Kekangan Kewangan?

Pusat Pengajian Ekonomi
Fakulti Ekonomi dan Pengurusan
Universiti Kebangsaan Malaysia
43600 UKM Bangi, Selangor D.E.

mohadis@ukm.my

Universiti Putra Malaysia


Islamic International University of Malaysia


International Centre for Education in Islamic Finance (INCEIF)


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

cash flow; financial constraints; GMM.; investment; Q-model
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Bibliography

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Ismail, M. A., Ibrahim, M. H., Yusoff, , & zainal, (2010). Does Firm Size Matter for the Financial Constraints?. Jurnal Ekonomi Malaysia, 44, 73–81.

@article{Ismail2010does,
  title={Does Firm Size Matter for the Financial Constraints?},
  author={Ismail, Mohd Adib and Ibrahim, Mansor and Yusoff, Mohammed and zainal, Mohd},
  journal={Jurnal Ekonomi Malaysia},
  volume={44},
  number={},
  pages={73—81},
 

year={2010},
}

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