Financial factors have been the main focus in influencing the firm\u2019s real activities. Accessibility to financial resources is a significant determinant to increase firm productivity and subsequently generate firm\u2019s growth. This paper will study the impact of financial constraints on firm\u2019s productivity in Malaysia by using a firm level panel data analysis. System Generalized Method of Moments (GMM) was used in this study. The empirical results show that financial factor has a significant impact on productivity of firm. Firm\u2019s cash flow affects firm\u2019s productivity. This indicates that the shortage of internal funds causing firm unable to access the external finance for financing investment activities. The study also finds that small firms suffer financial constraints in enhancing productivity, while large firms are not financially constrained. Therefore, the findings of this study are important in explaining the relationship between financial constraints and productivity in order to assist the policy maker to formulate the policy that can spur economic growth in Malaysia.<\/p>\n","protected":false},"template":"","tags":[186,176,180,372,538],"jel-code":[],"article-type":[1329],"class_list":["entry","author-jem","post-5291","article","type-article","status-publish","tag-economic-growth","tag-financial-constraints","tag-gmm","tag-panel-data","tag-productivity","article-type-normal-article"],"yoast_head":"\n