Access to Financing and Firm Growth: Does Firm Size Matter?
Author: Shafaq Munir

Why do firms have unequal growth? Although various factors of firms have been suggested as a cause to heterogeneity in firm growth, economists give a little importance to financial structure in influencing firm growth. In this research, we use a sample of Small, Medium and large firms registered at Pakistan Stock Exchange for the period 2005-2015 to show that financial structure is quantitavely and significantly important in firm growth. Our results suggest that age of the firm is the most prominent factor towards determining firm growth. We also find that size and growth of firm are conversely related that leads to rejection of Gibrat’s law of proportionate effect. Another notable finding is that internal funds have a positive impact on growth. But as the financial constraints are relieved, the firms’ preference to finance their projects switches to external funds and reduces the dependence on internal funds. But still the small firms accumulate more internal funds even after release in financial constraints because of their expensive borrowing and more associated risks. Supervisor:- Dr. Abdul Rashid

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Keywords : Financing and Firm Growth, Firm Size
Supervisor: Abdul Rashid

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