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

Journal of International Development, 2020

52 Pages Posted: 30 Nov 2020

See all articles by Burhan Can Karahasan

Burhan Can Karahasan

Piri Reis University - Department of Economics and Finance

Firat Bilgel

MEF University

Date Written: October 7, 2020

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 percent through access to finance and by 12 to 40 percent via its direct effect. About 3 to 16 percent of the total effect is mediated through financial access while the remaining is the direct effect.

Keywords: Financial Intermediation; Causal Mediation Analysis; MENA; State-Business Relations

JEL Classification: F65; O43

Suggested Citation

Karahasan, Burhan Can and Bilgel, Firat, State-Business Relations, Financial Access and Firm Performance: A Causal Mediation Analysis (October 7, 2020). Journal of International Development, 2020, Available at SSRN: https://ssrn.com/abstract=3707032 or http://dx.doi.org/10.2139/ssrn.3707032

Burhan Can Karahasan (Contact Author)

Piri Reis University - Department of Economics and Finance ( email )

Turkey

Firat Bilgel

MEF University ( email )

Ayazağa Cad. No.4 34396
Maslak - Sariyer
Istanbul
Turkey

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
4
Abstract Views
68
PlumX Metrics