State–Business Relations, Financial Access and Firm Performance: A Causal Mediation Analysis. (1st September 2020)

• Record Type: Journal Article
• Authors: Karahasan, Burhan Can; Bilgel, Fırat
• Is Part Of: Journal of international development. Volume 32:Number 7(2020:Oct.)
• Page Start: 1033
• Page End: 1074
• Publication Date: 2020-09-01
• Subjects: financial intermediation -- causal mediation analysis -- MENA -- state–business relations; Economic development projects -- Developing countries -- Periodicals; Developing countries -- Economic policy -- Periodicals; Developing countries -- Foreign economic relations -- Periodicals; Economic development -- Periodicals; 330.91724
• DOI: 10.1002/jid.3484
• Languages: English
• ISSNs: 0954-1748

Abstract

Abstract: This study investigates the triangular relationship among state–business relations, financial access and economic performance in the Middle East and North Africa. We hypothesize that financial intermediation is a significant mediating factor in the relationship between state–business relations and firm performance. Employing a causal mediation analysis, results show that inefficient ties with the state are a cause of poor firm performance. Inefficient state–business relations reduce firm performance by 2.3 to 4.4 per cent through access to finance and by 12 to 40 per cent via its direct effect. About 3 to 16 per cent of the total effect is mediated through financial access, while the remaining is the direct effect. © 2020 John Wiley & Sons, Ltd.