Measures of Financial Constraints in Kenya

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dc.contributor.authorKirui, Benard Kipyegon
dc.contributor.authorWawire, Nelson H. W.
dc.date.accessioned2022-10-26T11:28:57Z
dc.date.available2022-10-26T11:28:57Z
dc.date.issued2018
dc.descriptionA Research Article in the International Journal of Economics and Financial Issuesen_US
dc.description.abstractUnderstanding the effect of financial constraints on firms’ real decisions requires accurate identification of financially constrained firms. Unfortunately,identifying financially constrained firms is a challenge that is yet to be resolved. Against this background, this study identified financially constrained firm-years in Kenya and evaluated how well proxies of financial constraints generated in an endogenous switching regression context measure financial constraints. About 66% of the firm-years in the sample considered are suffering from financial constraints. This suggests that financial constraint problem is affecting a higher number of firms over a longer period of time. Furthermore, there is no efficiency gain in using endogenous switching regression indices since the sample separation produced by the initial values outperformed endogenous switching regression final classification values. In particular, size-age measure does a better job of identifying financially constrained firms and producing consistent results, and is the only measure that approximates experienced financial constraints well.en_US
dc.identifier.citationKirui, B. K., & Wawire, N. H. (2018). Measures of financial constraints in Kenya. International Journal of Economics and Financial Issues, 8(1), 217.en_US
dc.identifier.issn2146-4138
dc.identifier.urihttp://ir-library.ku.ac.ke/handle/123456789/24357
dc.language.isoenen_US
dc.publisherInternational Journal of Economics and Financial Issuesen_US
dc.subjectManufacturingen_US
dc.subjectInvestmenten_US
dc.subjectCapital Structureen_US
dc.titleMeasures of Financial Constraints in Kenyaen_US
dc.typeArticleen_US
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