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

Author

Listed:
  • Abubakr Saeed

    (COMSATS Institute of Information Technology, Pakistan)

  • Muhammad Sameer

    (University of Bedfordshire, UK
    Brunel University, UK)

Abstract

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.

Suggested Citation

  • Abubakr Saeed & Muhammad Sameer, 2015. "Business groups and financial constraints: evidence from Pakistani group affiliated firms," Journal of Developing Areas, Tennessee State University, College of Business, vol. 49(2), pages 355-361, April-Jun.
    • Handle: RePEc:jda:journl:vol.49:year:2015:issue2:pp:355-361
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    File URL: http://muse.jhu.edu/journals/journal_of_developing_areas/v049/49.2.saeed.html
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    Citations

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    Cited by:

    1. Ishtiaq Ahmad, 2017. "Do Group Affiliated And Unaffiliated Firms Hold Cash Differently? The Case Of Pakistan," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 373-384, July.

    More about this item

    Keywords

    financial constraints; business groups; internal capital market; investment;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity

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