Policy initiatives and …firms access to external fi…nance: Evidence from a panel of emerging Asian economies

This paper analyses the impact of policy initiatives co-ordinated by Asian national governments on fi…rms access to external …finance, using a unique …firm-level database of eight Asian countries- Hong Kong SAR, Indonesia, Korea, Malaysia, Philippines, Singapore, Taiwan and Thailand over the period of 1996-2012. Using a difference-in- differences approach and controlling for …firm-level and macroeconomic factors, the results show a signi…cant impact of policy on …rmsaccess to external …nance. After splitting …firms into constrained and unconstrained, using several criteria, the results document that unconstrained …firms bene…ted signi…cantly in obtaining external …finance, compared to their constrained counterparts. Finally, we show that the increase in access to external …nance after the policy initiative helped …rms to raise their investment spending, especially for unconstrained …firms.