Working Capital and Fixed Investment Effect on Sales Growth in SAARC Countries SMEs

Abstract

The study investigates the impact of various financing sources of working capital and fixed investment on sales growth. Population of the study comprises South Asian Association for Regional Cooperation (SAARC) countries' small and medium sized enterprises (SMEs). Data of 6777 SMEs is retrieved from World Bank's website. Multiple regression model is used to achieve the study objectives. Results signify a positive link between bank financing use for working capital and sales growth while the negative link between friends and family finance and sales growth is observed. Similarly all formal sources of finance used for fixed investment have positive link with sales growth. Finally, it is found that the government interventions and policy makers can alleviate access to formal sources of finance for boosting sales growth.