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Internal Finance and Growth: Comparison Between Firms in Indonesia and Bangladesh

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  • Humaira Husain

    (Department of Economics, School of Business and Economics, North South University, Dhaka, Bangladesh.)

Abstract

This paper investigates a panel of 289 Indonesian firms and 73 Bangladeshi firms over the period 1998-2006 to study the extent to which the availability of the Internal finance in terms of cash-flow influences firms' growth. There is less than one for one correspondence between assets growth and Internal Finance using the simple dynamic asset growth model augmented with cash-flow. This result is robust to estimating more general and extended dynamic model. Growth of assets is not constrained by the profit generating capacity of firms in Indonesia as well as in Bangladesh. Along with internally generated funds, growth of firms is determined by external equity finance, as well as institutional finance.

Suggested Citation

  • Humaira Husain, 2015. "Internal Finance and Growth: Comparison Between Firms in Indonesia and Bangladesh," International Journal of Economics and Financial Issues, Econjournals, vol. 5(4), pages 1038-1042.
    • Handle: RePEc:eco:journ1:2015-04-25
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Assets Growth; Cash-flow; Equity Finance;
    All these keywords.

    JEL classification:

    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing

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