HOW FINTECH TRANSFORM THE RELATIONSHIP IN BETWEEN FINANCING CONSTRAINTS AND CORPORATE LIQUIDITY? EVIDENCE FROM PAKISTAN

Abstract

In underdeveloped nations’ businesses face significant challenges when they need to understand cash flow and manage financial constraints. Researchers who study developing nations find financing restrictions more credible because these markets exhibit reduced activity in corporate bonds and commercial papers and restricted equity market regulation. The rapid growth of financial technology i.e. Fintech in Pakistan has a significant impact on businesses. So, the purpose of this study is to examine the relationship between FinTech, financing constraints, and corporate liquidity using the data of Pakistani manufacturing companies listed on the PSX in between 2013 and 2024. For the analysis of data, it gathered from different sources i.e.  Findex database, State bank of Pakistan, PSX firms reports, research surveys, and research reports by different organizations. Hence, by using SPSS for the data analysis we found that financing constraints had an adverse impact on a firm's liquidity. It means that when firms face greater financing constraints, their liquidity management worsens. However, the negative effect of financing constraints on company liquidity will be lessened by financial technology (Fintech), which will also have favorable external impacts.