Business groups and financial constraints: evidence from Pakistani group affiliated firms

We test whether group affiliation reduces the financial constraints for the affiliated firms in Pakistan. Results reveal that group affiliated firms are not financially constrained. Further, we find evidence for an internal capital market in business groups that reduces the financing constraints of the affiliated firms. Surprisingly, positive effect of business affiliation is limited only to firms affiliated to twenty largest business groups.

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Year of publication:	2015
Authors:	Saeed, Abubakr ; Sameer, Muhammad
Published in:	Journal of Developing Areas. - College of Business. - Vol. 49.2015, 2, p. 355-361
Publisher:	College of Business
Subject:	financial constraints \| business groups \| internal capital market \| investment

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Type of publication:	Article
Classification:	G32 - Financing Policy; Capital and Ownership Structure ; E22 - Capital; Investment (including Inventories); Capacity
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011213010