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...

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Main Authors:	Ismail, Mohd Adib, Ibrahim, Mansor, Yusoff, Mohammed, Zainal, Mohd-Pisal
Format:	Article
Language:	English
Published:	The UPM Press 2010
Subjects:	HG4001 Financial management. Business finance. Corporation finance.
Online Access:	http://irep.iium.edu.my/1742/ http://irep.iium.edu.my/1742/ http://irep.iium.edu.my/1742/1/Financial_Constraints_and_Firm_Investment.pdf

id	iium-1742
recordtype	eprints
spelling	iium-17422011-09-08T08:54:21Z http://irep.iium.edu.my/1742/ Financial constraints and firm investment in Malaysia: an investigation of investment-cash flow relationship Ismail, Mohd Adib Ibrahim, Mansor Yusoff, Mohammed Zainal, Mohd-Pisal HG4001 Financial management. Business finance. Corporation finance. 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. The UPM Press 2010 Article PeerReviewed application/pdf en http://irep.iium.edu.my/1742/1/Financial_Constraints_and_Firm_Investment.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://www.econ.upm.edu.my/ijem/vol4no1/bab02.pdf
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English
topic	HG4001 Financial management. Business finance. Corporation finance.
spellingShingle	HG4001 Financial management. Business finance. Corporation finance. Ismail, Mohd Adib Ibrahim, Mansor Yusoff, Mohammed Zainal, Mohd-Pisal Financial constraints and firm investment in Malaysia: an investigation of investment-cash flow relationship
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.
format	Article
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
title	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_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_sort	financial constraints and firm investment in malaysia: an investigation of investment-cash flow relationship
publisher	The UPM Press
publishDate	2010
url	http://irep.iium.edu.my/1742/ http://irep.iium.edu.my/1742/ http://irep.iium.edu.my/1742/1/Financial_Constraints_and_Firm_Investment.pdf
first_indexed	2023-09-18T20:09:13Z
last_indexed	2023-09-18T20:09:13Z
_version_	1777407364444454912

Financial constraints and firm investment in Malaysia: an investigation of investment-cash flow relationship

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