Abstract
Shifts from firm-level investment efficiency occur due to market imperfections and information asymmetry. This translates to an increased cost of capital, which leads to over or under-investments. This study demonstrates the absence of a direct association between investment efficiency and financial constraints in African firms, complementing the efficient market hypothesis. We observed firms across different industries listed on the JSE from 2009 to 2019. Empirical results from panel data analysis reveal that financial constraints drive improved investment levels and firms in this region depend on external funds – specifically credits – to invest.
| Original language | English |
|---|---|
| Pages (from-to) | 125-133 |
| Number of pages | 9 |
| Journal | Economics and Business Letters |
| Volume | 11 |
| Issue number | 3 |
| DOIs | |
| Publication status | Published - Sept 2022 |
Keywords
- Financial constraints
- Investment efficiency
- Panel data
ASJC Scopus subject areas
- Business and International Management
- General Economics,Econometrics and Finance
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