The Impact of Financial Constraints on Firms' Productivity in Malaysia

Translated title of the contribution: Kesan kekangan kewangan ke atas produktiviti firma di Malaysia

Mohd Adib Ismail, Siti Sarah Annuar

Research output: Contribution to journalArticle

3 Citations (Scopus)

Abstract

Financial factors have been the main focus in influencing the firm's real activities. Accessibility to financial resources is a significant determinant to increase firm productivity and subsequently generate firm's growth. This paper will study the impact of financial constraints on firm's productivity in Malaysia by using a firm level panel data analysis. System Generalized Method of Moments (GMM) was used in this study. The empirical results show that financial factor has a significant impact on productivity of firm. Firm's cash flow affects firm's productivity. This indicates that the shortage of internal funds causing firm unable to access the external finance for financing investment activities. The study also finds that small firms suffer financial constraints in enhancing productivity, while large firms are not financially constrained. Therefore, the findings of this study are important in explaining the relationship between financial constraints and productivity in order to assist the policy maker to formulate the policy that can spur economic growth in Malaysia.

Original languageMalay
Pages (from-to)87-95
Number of pages9
JournalJurnal Ekonomi Malaysia
Volume49
Issue number2
DOIs
Publication statusPublished - 2015

Fingerprint

Malaysia
Financial constraints
Productivity
Firm productivity
Factors
Generalized method of moments
Firm growth
Large firms
Politicians
Financial resources
Cash flow
Shortage
External finance
Investment activity
Financing
Economic growth
Empirical results
Accessibility
Small firms
Panel data analysis

ASJC Scopus subject areas

  • Business, Management and Accounting (miscellaneous)

Cite this

The Impact of Financial Constraints on Firms' Productivity in Malaysia. / Ismail, Mohd Adib; Annuar, Siti Sarah.

In: Jurnal Ekonomi Malaysia, Vol. 49, No. 2, 2015, p. 87-95.

Research output: Contribution to journalArticle

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