Analysis of External Financing Use: A Study of Small and Medium Enterprises in Malawi

Provided by: Canadian Center of Science and Education
Topic: Enterprise Software
Format: PDF
This study analyzes whether firm characteristics including firm size, firm age, availability of information, firm growth and industry significantly determine SMEs' use of external financing or not and whether there are differences in the use of external financing between firms of different sizes and industries or not. Using firm level data from the World Bank Enterprise Survey, a fractional logit regression model was employed. The results indicate that firm size, availability of information and firm growth significantly determine the use of external financing, while firm age and industry are not important in determining the use of external financing.

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