skip to main content

Financial Constraints, Tax Burdens, and Firm Growth: Evidence from Indonesia

Universitas Indonesia, Indonesia

Open Access Copyright (c) 2022 JURNAL DINAMIKA EKONOMI PEMBANGUNAN

Citation Format:
Abstract
Using a subjective measure of the constraints and data from World Bank Enterprise Survey, this paper investigates whether two business constraints, financial constraints and tax burdens, have the same impact on Indonesian firm growth. This paper employs instrumental variable estimation to handle endogeneity problems and finds that among the two business constraints examined in the analyses, only the financial constraint is a binding constraint that has a significantly negative impact on Indonesian firm growth, while taxes have a positive and significant impact on firm growth. Based on size classification, a significant impact is only found on large firms. Financial constraints and tax burdens are likely not to be binding constraints to firm growth for small firms, and the benefits from taxes are also not found on these firms. Further investigation of financial constraints reveals that private firms, manufacturing firms, and young firms are more sensitive to the negative impact of financial constraints.

Note: This article has supplementary file(s).

Fulltext View|Download |  Data Set
World Bank Enterprise Survey (WBES) Data
Subject
Type Data Set
  Download (949KB)    Indexing metadata
 Research Instrument
Ringkasan Do file
Subject
Type Research Instrument
  Download (11KB)    Indexing metadata
Keywords: financial constraint; tax burden; firm growth; Indonesia

Article Metrics:

Last update:

No citation recorded.

Last update: 2024-11-22 07:41:06

No citation recorded.