Financing Constraint and Firm-Level Investment Following a Financial Crisis in Indonesia
This paper deals with the sensitivity relation between firm investment and internal liquidity by splitting samples into two different groups of firm, namely the tradable (T) and non-tradable (N) sectors. This paper finds that during boom periods, there is no significant financial constraint on the T and N sectors. In post-crisis periods, it seems that both sectors also have no significant important problem in their internal finance. Both sectors basically move comparably. The main finding is relatively different with several theoretical predictions, especially Tornell and Westermann (2002a, 2004), in which the T-sector would be predicted as experiencing less financial constraint in burst period. However, we find that debt is important variable for sustaining investment in Indonesia. By employing panel data analysis, the findings of this study can shed light on the financing behavior of listed companies in Indonesia, as well as on their investment behavior in the midst of financing constraints and credit market imperfections. The study's sample contains 147 companies listed on the Jakarta Stock exchange for at least 5 five consecutive years between 1994 – 2004.
|Date of creation:||Jul 2007|
|Publication status:||Published in Working paper GATE 2007-14. 2007|
|Note:||View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00174435|
|Contact details of provider:|| Web page: https://hal.archives-ouvertes.fr/|
When requesting a correction, please mention this item's handle: RePEc:hal:journl:halshs-00174435. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CCSD)
If references are entirely missing, you can add them using this form.