Articlegreen2016

Working Capital Management and Firm Performance in Emerging Economies: Evidence from India

84 citations0/0 files storedManagement and Labour Studies

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Working Capital and Financial Performance Corporate Finance and Governance Supply Chain and Inventory Management

Abstract

This article aims to investigate the relationship between working capital management and firm performance in an emerging market. The analysis is done over a long window spanning across 2000–2014 by using ordinary least square (OLS), fixed- and random-effects model and generalized method of moments (GMM) on 2,327 firm-year observations, a panel data of 179 companies listed on the S&P BSE 500 Index of Bombay Stock Exchange (BSE). For robustness, in addition to accounting performance, market-based performance measure has also been employed to measure firm performance. This study based on India finds a negative relationship between the working capital management and firm performance, necessitating the need to efficiently manage the working capital for enhanced profitability.

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References

1991Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations 2003Does Working Capital Management Affect Profitability of Belgian Firms?1998The Determinants of Corporate Liquidity: Theory and Evidence 2007Effects of working capital management on SME profitability 2007WORKING CAPITAL MANAGEMENT AND PROFITABILITY-CASE OF PAKISTANI FIRMS 2006TRENDS IN WORKING CAPITAL MANAGEMENT AND ITS IMPACT ON FIRMS, PERFORMANCE: AN ANALYSIS OF MAURITIAN SMALL MANUFACTURING FIRMS 1980A Cash Conversion Cycle Approach to Liquidity Analysis 2013Working capital management, corporate performance, and financial constraints

Cited by

2019Working capital management, firm performance and macroeconomic factors: Evidence from Iran 2017Working capital management, firm performance and financial constraints 2021Working Capital Management and SMEs Profitability in Emerging Economies: The Ghanaian Case 2023Cash flow management and its effect on firm performance: Empirical evidence on non-financial firms of China 2020Working capital management and managerial talent

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