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Was Bail-Out A Success? Evidence from the Investment-Cash Flow Relationship

Jurnal Ekonomi Malaysia

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Title Was Bail-Out A Success? Evidence from the Investment-Cash Flow Relationship
 
Creator Ismail, Mohd Adib
H. Ibrahim, Mansor
Zainal, Mohd Pisal
Yusoff, Mohammed
 
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Description ABSTRACTThe 1997-1998 Asian financial crisis affected the balance sheets of many Malaysian firms, which increased the financialconstraints on such firms. To counter the impacts, the Malaysian government carried out various directed policymeasures known collectively as the bail-out policy. The present paper examines the success of the policy to reducethe financial constraints. The present paper uses panel estimation methods to analyze the relationship between firms’investments and their cash flows. The sample of study is split into two subsamples, consisting of the periods beforeand after the financial crisis, respectively. The success of the policy is measured based upon the easing of financialconstraints faced by Malaysian firms. Using annual financial data, consisting of unbalanced panel from the period of1988 to 2005, the results found favour the bail-out policy. This finding indicates the success of the bail-out policy toreduce the severity of financial constraints.Keywords: Bail-out; financial constraints; investment; cash flow; panel dataABSTRAKKrisis kewangan Asia pada tahun 1997-1998 telah memberi kesan ke atas kunci kira-kira banyak firma Malaysia yangboleh menyebabkan berlaku kekangan kewangan. Untuk mengatasi impak ini, kerajaan Malaysia telah melaksanakanpelbagai bentuk dasar terarah yang dikenali sebagai dasar jaminan keluar. Oleh itu, kertas kerja ini bertujuan untukmengkaji kejayaan dasar tersebut untuk mengurangi kesan kekangan kewangan. Kertas kerja ini menggunakan kaedahpenganggaran panel untuk menganalisis hubungan antara pelaburan firma dan aliran tunai. Sampel kajian dipecahkankepada dua subsampel masa sebelum dan selepas krisis kewangan. Kejayaan dasar jamin keluar adalah bergantungkepada keringanan kekangan kewangan. Dengan menggunakan data panel tidak seimbang bagi tahun 1988 hingga2005, keputusan kajian menunjukkan sokongan kepada dasar jaminan keluar. Dapatan kajian ini menunjukkan kejayaanperlaksanaan dasar jamin keluar untuk mengurangkan tekanan kekangan kewangan.Kata kunci: Jaminan keluar; kekangan kewangan; pelaburan; aliran tunai, data panel
 
Publisher Universiti Kebangsaan Malaysia
 
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Date 2013-07-01
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
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Identifier http://ejournal.ukm.my/jem/article/view/5570
 
Source Jurnal Ekonomi Malaysia; Vol 47, No 1 (2013): Jurnal Ekonomi Malaysia; 31-40
0126-1962
 
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