Financial Constraints on Firm Growth: The Role of Firm Age in the ASEAN–6

Yee Ling Ng; Wei Theng Lau; Wei Ni Soh; Nazrul Hisyam Ab Razak

doi:10.18778/1508-2008.27.05

Authors

Yee Ling Ng Universiti Putra Malaysia, School of Business and Economics, Selangor, Malaysia https://orcid.org/0000-0001-6463-0827
Wei Theng Lau Universiti Putra Malaysia, School of Business and Economics, Selangor, Malaysia https://orcid.org/0000-0002-1196-5372
Wei Ni Soh Universiti Putra Malaysia, School of Business and Economics, Selangor, Malaysia https://orcid.org/0000-0003-3593-1684
Nazrul Hisyam Ab Razak Universiti Putra Malaysia, School of Business and Economics, Selangor, Malaysia https://orcid.org/0000-0001-7631-2391

DOI:

https://doi.org/10.18778/1508-2008.27.05

Keywords:

financial constraint, Fixed Effect Model, System GMM model, ASEAN, KZ index, WW index, firm growth

Abstract

The paper assesses the moderating role of firm age in the relationship between financial constraints, as measured by the KZ index, and the WW index on three alternative measures of firm growth (Asset growth, ROA, and ROE) in the ASEAN–6 region. This study employs a sample of ASEAN–6 listed firms over the period 2009–2019 using Fixed Effects and the System GMM model. Firm age is found to interact positively with financial constraints in their effects on firm growth. The negative impact of financial constraints on firm growth is less severe with older age firms.

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