This study considers the importance of firm characteristics in explaining the degree of
business constraints facing Pakistani firms in the Investment Climate Survey. We quantify
how firms with differing characteristics experience particular problems. After controlling for
other factors, the largest differences in responses to business constraints occur among firms
that vary by manufacturing industry, and among firms operating under different ownership
structures or selling in different markets. In some cases, firm size and firm location also play
an important role. The age of the firm generally does not lead to significant differences. These
results account for the heterogeneity of firms better than others, and may be important for
policy-makers to develop more specific approaches to fostering the investment climate.