State–Business Relations, Financial Access and Firm Performance: A Causal Mediation Analysis

Karahasan, Burhan Can; Bilgel, Fırat

doi:10.1002/jid.3484

Cited by 4 publications

(5 citation statements)

References 86 publications

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“…Overall, the results are consistent with the findings from previous studies (Amsden, 1989;Fajnzylber et al, 2009;Sen and Velde, 2009;Qureshi and Te Velde, 2013;Hosny, 2017;Arayssi et al, 2019;Karahasan and Bilgel, 2020;Ozdamar et al, 2020;Abdo and Fakih, 2022). Our results show that the obstacles in business and investment climate can negatively affect the firm performance, which is also found in the previous studies.…”

Section: Repssupporting

confidence: 92%

“…Our results show that the obstacles in business and investment climate can negatively affect the firm performance, which is also found in the previous studies. In particular, Hosny (2017) Arayssi et al (2019) and Ozdamar et al (2020) show that political stability is a significant determinant of firm performance, while Karahasan and Bilgel (2020) found obstacles related to access to finance reduce firm performance by 2.3-4.4% in eight MENA region countries and Turkey. These findings confirm the results of our study where we employ an index of business and investment climate that includes various obstacles, such as access to finance, political instability, corruption and electricity infrastructure among others.…”

Section: Repsmentioning

confidence: 99%

“…The business and investment climate nexus climate obstacles and resource misallocation, as we do in Egypt and Turkey. There are few recent studies exploring the role of business and investment climate in the MENA region countries (EBRD et al, 2016;Brown and Earle, 2017;Hosny, 2017;Karahasan and Bilgel, 2020;Ozdamar et al, 2020). For instance, Karahasan and Bilgel (2020) using a causal mediation analysis explored the role of access to finance in eight MENA region countries and Turkey over the period 2013-2015, and they found obstacles related to access to finance reduce firm performance by about 2.3-4.4%.…”

Section: Literature Reviewmentioning

confidence: 99%

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The nexus between business–investment climate and firm performance in the Middle East and North Africa (MENA) region

Giovanis

Özdamar²

2022

REPS

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PurposeEffective business and investment climate can lead to a higher rate of investment, profits and improved productivity, through the creation of an institutional environment, where the state provides high-quality public goods. This study aims to explore the impact of the business–investment climate on firm performance in a sample of six countries in the Middle East and North Africa (MENA) region and Turkey. Furthermore, we extend our analysis to explore the impact of business–investment climate on the resource misallocation in Egypt and Turkey.Design/methodology/approachThe study used fixed effects models to investigate the relationship between the business and investment climate, expressed by the obstacles in state–business relations- and the firm performance, which is measured by the firm's value-added, the labour productivity and the total factor productivity To reduce the endogeneity coming from possible reverse causality and the perceptions about the business climate, an instrumental variables (IV) approach applying the two-stage least squares (2SLS) method was followed. The empirical analysis relies on data derived from the World Bank Enterprise Surveys.FindingsBased on estimates, the obstacles in business climate may reduce the firm performance measures by 15–40%. These findings indicate the importance of quality in the business climate and how the improvement in its efficiency can have a very considerable positive impact on firms' performance and thus on the overall economic growth of a country.Originality/valueThis is the first study exploring the impact of business–investment climate on various measures of the firm performance and the resource misallocation in a large sample of countries in the MENA region.

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Section: Repssupporting

confidence: 92%

Section: Repsmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

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The nexus between business–investment climate and firm performance in the Middle East and North Africa (MENA) region

Giovanis

Özdamar²

2022

REPS

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“…These results can also be compared with the assessment of similar studies' sensitivity analyses (Imai, Keele, & Tingley, 2010; Imai, Keele, & Yamamoto, 2010; Solé‐Ollé & Sorribas‐Navarro, 2018; Karahasan & Bilgel, 2020). A final challenge of the identification strategy is related to the structural form of mediator equation.…”

Section: Resultsmentioning

confidence: 99%

To make growth reduce poverty, industrialize: Using manufacturing to mediate the effect of growth on poverty

Karahasan

2023

Development Policy Review

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Motivation: While economic growth is usually necessary to reduce poverty, it is often not sufficient. Industrialization, especially manufacturing, tends to create jobs that are more productive than in other sectors, and which pay more, thereby reducing poverty. Structure of production therefore matters as well as growth of production. Purpose: How much does industrialization mediate the relation of economic growth to poverty reduction? Methods and approach: We deploy Causal Mediation Analysis, with industrialization as the mediator. The mechanism decomposes the impact of economic growth into direct effects on poverty, and those that apply indirectly through the mediator of industry. Data comes from the Groningen Growth and Development Centre and UNU-WIDER Economic Transformation Database (ETD) which covers 51 countries in the global South from 1990 to 2018.Findings: Economic growth directly reduces poverty, but the full impact arises from the mediating role of industrialization. Almost 50% of the impact on poverty occurs through employment in manufacturing.Policy implications: Social policies to reduce poverty will be incomplete if the production structure of economy is disregarded. Economic policy must consider the importance of industrial economic activities to amplify the impact of economic progress. On the contrary, policies promoting

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“…It is very important for organizational development and profit generation as in organizations and it is very critical to have a clear understanding of the successful implementation of the strategies in firm performance achievement (Ren, Xiao, Yang, & Liu, 2019;Khan, Al-Jabri, & Saif, 2021). Financial conditions are there in measuring the firm performance and accordingly, profit margins, return on investments, capital structure, return on equity, net profit margin, and revenue percentages (Leicht-Deobald, Huettermann, Bruch, & Lawrence, 2021;Karahasan & Bilgel, 2020). Same time non-financial improvements can be recognized as another indicator of the firm performance (Yuliansyah & Dewi, 2020;Habib-Uz-Zaman, Halabi, & Khan, 2011).…”

Section: Firm Performancementioning

confidence: 99%

Impact of Financial Literacy on Firm Performance of SMEs in Sri Lanka: Mediating Role of Enterprise Risk Management

Premarathna,

Madurapperuma,

Wijekoon

2023

EMSJ

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Small and medium enterprises (SMEs) can be recognized as a main role player in a country’s economy. This study mainly focuses on identifying a few factors that could lead to identifying a viable business strategy for SMEs in Colombo District, Sri Lanka. As a developing country, Sri Lanka needs to have lucrative business potential and sustainability of the business. It has been identified that financial literacy (FL) plays a crucial role in enhancing business performance, and enterprise risk management (ERM) is considered to be another important factor in the betterment of business performance. Therefore, in this deep study, it was mainly hypothesized that higher FL leads to the high performance of SMEs in Sri Lanka. Same time, ERM was formed to mediate the relationship between FL and SME performance. FL found three constructs which are Financial Knowledge (FK), Financial Behavior (FB) and Financial Attitude (FA), and ERM following the same decomposed into three constructs, namely Identification of Risk (IR), Facing Uncertainties (FU) and Risk Reaction (RR). Results confirmed that there is a positive and direct relationship between FL and SME performance and ERM has a mediate relationship between FL and SME performance.

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State–Business Relations, Financial Access and Firm Performance: A Causal Mediation Analysis

Cited by 4 publications

References 86 publications

The nexus between business–investment climate and firm performance in the Middle East and North Africa (MENA) region

The nexus between business–investment climate and firm performance in the Middle East and North Africa (MENA) region

To make growth reduce poverty, industrialize: Using manufacturing to mediate the effect of growth on poverty

Impact of Financial Literacy on Firm Performance of SMEs in Sri Lanka: Mediating Role of Enterprise Risk Management

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