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Nastiti, Pambayun Kinasih Yekti, Apriani Dorkas Rambu Atahau, and Supramono Supramono. "THE DETERMINANTS OF WORKING CAPITAL MANAGEMENT: THE CONTEXTUAL ROLE OF ENTERPRISE SIZE AND ENTERPRISE AGE." Business, Management and Education 17, no. 2 (October 9, 2019): 94–110. http://dx.doi.org/10.3846/bme.2019.10409.
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Purpose – working capital management plays a vital role in determining the continuity of enterprises’ business activities. Enterprises should manage their working capital efficiently to avoid excessive working capital investments and at the same time, to maintain their liquidity. This study aims to examine the determinants of working capital management and to test the different effects of the determinants of working capital management based on enterprise size and enterprise age. Research methodology – the sample consists of 117 manufacturing enterprises listed at the Indonesian Stock Exchange for the years 2010–2017. Panel data regression was used to test the hypothesis. Findings – the findings reveal that sales growth and economic growth determine working capital management. However, the effects of the determinants of working capital management differ depending on enterprise size and enterprise age. Specifically, economic growth is the only determinant that exhibits different effects on working capital management between different enterprise size and enterprise age subsamples. Meanwhile, besides economic growth, capital expenditure, and operating cash flow are the other enterprise-specific determinants that exhibit different effects on working capital management between the two enterprise age subsamples. Research limitations – this study only measures enterprise size with total assets. Thus, we advise future studies to complement this proxy with other measures such as market value and the listing size criterion (main board vs development board). Further, it is necessary to analyse the non-linear relationship between leverage and working capital management to explain the positive effect of leverage on working capital management. Practical implications – the empirical results suggest that manufacturing enterprises must focus more on their sales growth because it affects their ability to manage their working capital efficiently. Besides, younger manufacturing enterprises need to shorten their cash cycles that are longer relative to old enterprises. Originality/Value – no previous studies have analysed the determinants of working capital management based on enterprise characteristics, especially enterprise size and age. Specifically, in the scientific literature, enterprise size and enterprise age mainly act as the dependent variables.
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Mazlan, Ahmad Rizal, and Choong Yuen Leng. "The Moderating Effect of Working Capital Management on the Relationship between Working Capital Determinants and Firm Performance." Indian-Pacific Journal of Accounting and Finance 2, no. 1 (January 1, 2018): 38–48. http://dx.doi.org/10.52962/ipjaf.2018.2.1.39.
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This research examines working capital management moderating role on the relationship between the key determinants of working capital and firm performance among 282 public-listed manufacturing firms in Malaysia for the period of 2010 to 2014. In this study, working capital management components are categorized into working capital requirement and net liquid balance. The evidence suggests that the relationship between critical determinants of working capital and firm performance is moderated by both working capital requirement and net liquid balance. Further, the results show that the research framework does form a contemporary working capital management model.
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Safia, Fazal. "DETERMINANTS OF WORKING CAPITAL “EVIDENCE FROM PRODUCTION AND SERVICE SECTOR OF PAKISTAN”." International Journal of Finance and Accounting 5, no. 1 (October 2, 2020): 67. http://dx.doi.org/10.47604/ijfa.1147.
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Purpose: Basic purpose of this study is to explore the factors or determinants of working capital. The effect of this research is threefold as its first aim is to explore the determinants of working capital in the service sector, second is to find the determinant of working capital in the production sector and third is to make a comparison between the findings of both sectors.
Research Methodology: Quantitative technique of data collection has been used under explanatory research method and working capital has been taken as dependent variable while return on assets, return on equity, leverage, sales growth, firm size of total assets and firm size of total sales have been taken as independent variables from production and services sector of Pakistan. A sample of 34 companies listed at KSE for 5 years (2007-2011) has been selected with a total observation of 170. Datawerecollectedfrombalancesheetsofthese companies fromofficialsiteofStateBankof Pakistan.
Findings: The finding of this research shows that the same selected variables are not a significant predictor of working capital in both sectors. In the service sector, all selected variables are significant predictor or working capital except for short term debt to total assets variable. However, in the production sector, only sales growth and return on assets is a significant predictor of working capital requirement.
Unique contribution to theory, practice and policy: In a developing country like in Pakistan, very little work has been done on working capital determinants. In developed countries and other developing countries, enough work has been done in that area, however, not previously study covers the comparison of the diverse sectors to determine working capital. This study will add a new dimension to the existing literature and cover the gaps in existing literature byaddingthe comparisonofdiverse nature sectors into the existing literature.
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Moussa, Amr Ahmed. "Determinants of working capital behavior: evidence from Egypt." International Journal of Managerial Finance 15, no. 1 (February 4, 2019): 39–61. http://dx.doi.org/10.1108/ijmf-09-2017-0219.
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Purpose The purpose of this paper is to empirically analyze and identify key factors affecting working capital behavior of companies listed on the Egyptian Stock Exchange. Design/methodology/approach Working capital requirement and cash conversion cycle were used to proxy working capital behavior. The study explored nine main factors widely discussed in previous research to explain working capital behavior: operating cash flow, growth opportunities, performance, firm value, age, size, leverage, economic conditions and industry type. The study employed a panel data analysis for 68 listed Egyptian industrial firms for the period 2000–2010. Different techniques of the generalized method of moments were used to test the validity of the research hypotheses. Findings The results show that working capital behavior is affected by various factors related to firm characteristics, economic conditions and industry type. Originality/value This study provides financial managers with a better understanding of the impact of different internal and macroeconomic factors on working capital behavior in an emerging market, such as Egypt’s.
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Alehegne, Damot. "Determinants of Working Capital Requirement on Manufacturing Firms." European Business & Management 5, no. 1 (2019): 1. http://dx.doi.org/10.11648/j.ebm.20190501.11.
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Elbadry, Ahmed. "The Determinants of Working Capital Management in the Egyptian SMEs." Accounting and Finance Research 7, no. 2 (March 14, 2018): 155. http://dx.doi.org/10.5430/afr.v7n2p155.
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Purpose– This paper explores the main determinants of working capital management in the Egyptian SMEs and explains its effect on working capital management. Also, I examine the relation between working capital management and SMEs' profitability and capital structure.Design/methodology/approach – The study sample include data for 138 SMEs working in Egypt and financed by the national bank of Egypt from 2010 to 2013. Data have been collected from SMEs financial statements for four years for each company. OLS regression models have been used to examine the effect of working capital determinants on working capital level measured by CCC. We used firm size and industry as control variables and robustness our results using full regression models for every year of analysis. All regression models were checked for normality, multicollinearity and hetroscedisticity. Findings – The main results reflect a negative and significant effect of SMEs profitability, tangible fixed assets, and leverage. Also, the industry represents a significant factor in determining the level of working capital in the Egyptian SMEs. Moreover, the effect of working capital management and SMEs profitability and capital structure decisions has been examined. The results reflect that the Egyptian SMEs follow an aggressive policy as businesses hold low level working capital which leads to high return and high degree of risk (measured by LEVERAGE).Research limitations/implications – The study limited to the Egyptian SMEs and financed by the National Bank of Egypt. Originality/value – The study explores the main determinants of working capital in the Egyptian SMEs and examined its effect on working capital management. Also, we examined the effect of working capital determinants on each component of working capital measured by cash conversion cycle. Moreover, I examined the effect of working capital on SMEs' profitability and capital structure decisions.
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Madhou, Ashwin, Imad Moosa, and Vikash Ramiah. "Working Capital as a Determinant of Corporate Profitability." Review of Pacific Basin Financial Markets and Policies 18, no. 04 (December 2015): 1550024. http://dx.doi.org/10.1142/s0219091515500241.
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This study examines the interaction of corporate profitability, working capital management and firm characteristics. Advanced quantitative techniques, such as dynamic panel estimation and median regression, are used to test the underlying relations. The findings indicate that both size and debt ratio are important determinants of corporate profitability and that profitable firms and losing firms tend to have different determinants of profitability. Several findings indicate that the effects of the components of working capital on profitability depend on firm characteristics such as the state of working capital (surplus/deficit) and where the firm lies in the profitability league.
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Mongrut, Samuel, Darcy Fuenzalida O’Shee, Claudio Cubillas Zavaleta, and Johan Cubillas Zavaleta. "Determinants of Working Capital Management in Latin American Companies." Innovar 24, no. 51 (January 1, 2014): 5–17. http://dx.doi.org/10.15446/innovar.v24n51.41235.
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The aim of this study is to determine the factors that affect working capital management in Latin American companies. Using an unbalanced panel data analysis for companies quoted in five Latin American capital markets it is shown that companies in Argentina, Brazil, Chile and Mexico are holding cash excesses, which could destroy firm value. Results show that the industry cash conversion cycle, the company market power, its future sales and country risk have an influence on the way Latin American companies manage their working capital with significant differences among countries in the region.
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Lazarus, Roslin, Stanley Lazarus, and Shobhna Gupta. "Influence on Corporate Performance by Determinants of Working Capital." Universal Journal of Accounting and Finance 9, no. 3 (June 2021): 411–23. http://dx.doi.org/10.13189/ujaf.2021.090316.
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Eldomiaty, Tarek Ibrahim, Mohamed Hashem Rashwan, Mohamed Bahaa El Din, and Waleed Tayel. "Firm, industry and economic determinants of working capital at risk." International Journal of Financial Engineering 03, no. 04 (December 2016): 1650031. http://dx.doi.org/10.1142/s2424786316500316.
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Purpose: The objective of this study is to examine the relative contribution of firm-level, industry-level and country level variables to working capital at risk. Working capital at risk is treated as the value at risk for a portfolio of firm’s current assets. As far as short-term liquidity is concerned, working capital at risk, being the maximum amount that a firm may lose at a certain confidence interval, must be the most important part that a firm’s management must focus on. Design/methodology/approach: This study empirically examines the possible associations between wide range of variables and working capital at risk. The sample firms include 143 non-financial firms listed in Egypt stock exchange. The data cover the years 2000–2014. The statistical tests include the fixed and random effects, testing for linearity versus nonlinearity. The least squares dummy variables and discriminant analysis are utilized. The working capital at risk is classified into three levels: low, medium and high. Findings: The general findings of the study show that cash conversion cycle and the leverage are the most significant determinants of working capital at risk. Both determinants have significant influence on the level of volatility of working capital throughout the three categories of working capital at risk. Originality/value: This study offers a new approach that deals with working capital as a portfolio, rather than single ratios, that firm’s management must decrease its volatility (value at risk), therefore, short-term liquidity can be improved significantly. This approach can be considered a financial engineering in terms of monitoring and managing short-term liquidity exposure.
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Kwenda, Farai. "Determinants of Working Capital Investment in South Africa: Evidence from Selected JSE-Listed Firms." Journal of Economics and Behavioral Studies 6, no. 7 (July 30, 2014): 569–80. http://dx.doi.org/10.22610/jebs.v6i7.518.
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This paper analyses the determinants of working capital investments of 92 companies listed on the Johannesburg Stock Exchange (JSE) over the period 2001-2010. Working capital management has grown in significance from being a survival issue to a strategic and competitive tool. Using the Generalized Method of Moments estimation, the study found that firms pursue target levels of current assets. However, the adjustment process is relatively slow. The study found that leverage, short-term finance and fixed investment significantly influence the level of working capital investment, while operating cash flows, state of the economy, firm size and sales growth rate were found to be statistically insignificantly related to working capital investment. The study recommends that managers understand the driving factors of working capital investment since working capital investment influences the value of the firm.
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Shah, Said, Safdar Husain Husain Tahir, and Saf Hasnu. "Determinants of Working Capital Policy: Comparing Domestic and Multinational Companies." Academy of Management Proceedings 2017, no. 1 (August 2017): 11194. http://dx.doi.org/10.5465/ambpp.2017.11194abstract.
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Tesfay, Amanuel, and G. S. Batra. "Determinants of Working Capital Management: Evidence from Ethiopian Corporate Sector." International Journal of Management Studies V, no. 4(6) (October 1, 2018): 24. http://dx.doi.org/10.18843/ijms/v5i4(6)/04.
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Maheshwari, Yogesh, and K. T. Vigneswara Rao. "Determinants of Corporate Cash Holdings." Global Business Review 18, no. 2 (February 1, 2017): 416–27. http://dx.doi.org/10.1177/0972150916668610.
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This article aims at examining the financial determinants of corporate cash holdings. The study employs panel data regression method. It uses the fixed-effects method based on Hausman test results for the estimation of panel data model. This study has implications that are beneficial for the business managers to have a better understanding and appreciation of the role and importance of the determinants of corporate cash holdings in formulating and evaluating the corporate financial policies. The results of the study indicate a strong positive relationship between cash holdings and cash flow, dividend payment, market-to-book ratio, net debt issuance and net equity issuance of the sample firms. It is also found that the cash holdings of these firms are negatively affected by net working capital, leverage, research and development expenditure as well as capital expenditure of the firm. The article will help researchers as well as managers to understand as to what motivates the firms to hold cash, given the fact that despite being often termed as a non-earning asset, firms generally hold more cash than their normal working capital requirement.
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Goel, Utkarsh, and Anil Sharma. "Working capital management efficiency in Indian manufacturing sector: trends and determinants." International Journal of Economics and Business Research 10, no. 1 (2015): 30. http://dx.doi.org/10.1504/ijebr.2015.070273.
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Akinlo, Olayinka Olufisayo. "Determinants of Working Capital Requirements in Selected Quoted Companies in Nigeria." Journal of African Business 13, no. 1 (January 2012): 40–50. http://dx.doi.org/10.1080/15228916.2012.657951.
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Wasiuzzaman, Shaista, and Veeri Chettiar Arumugam. "Determinants of Working Capital Investment: A Study of Malaysian PublicListed Firms." Australasian Accounting, Business and Finance Journal 7, no. 2 (2013): 63–83. http://dx.doi.org/10.14453/aabfj.v7i2.5.
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Schneider, Ulrike, and Martin Wagner. "Catching Growth Determinants with the Adaptive Lasso." German Economic Review 13, no. 1 (February 1, 2012): 71–85. http://dx.doi.org/10.1111/j.1468-0475.2011.00541.x.
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Abstract This paper uses the adaptive Lasso estimator to determine variables important for economic growth. The adaptive Lasso estimator is a computationally very efficient procedure that simultaneously performs model selection and parameter estimation. The computational cost of this method is negligibly small compared with standard approaches in the growth regressions literature. We apply this method for a regional dataset for the European Union covering the 255 NUTS2 regions in the 27 member states over the period 1995-2005. The results suggest that initial GDP per capita (with an implied convergence speed of about 1.5% per annum), human capital ( proxied by the shares of highly and medium educated in the working age population), structural labor market characteristics (the initial unemployment rate and the initial activity rate of the low educated) as well as being a capital region are important for economic growth.
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Yusri AL Khatib, Abdullah. "Determinants of Dividends for Real Estate Sector in Jordan." International Journal of Business and Management 15, no. 12 (November 28, 2020): 177. http://dx.doi.org/10.5539/ijbm.v15n12p177.
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This study focused on analyzing the internal and external determinants of dividends for an important sector in Jordan which is the real estate sector during 2014 - 2019. For that, dividends per share were considered as dependent variable. On the other hand, internal determinants were measured by current ratio, total assets turnover, fixed assets turnover, and working capital turnover. Also, external variables were measured by GDP growth rate, inflation consumer prices, and unemployment rate.
After conducting the statistical analysis, there was an impact of working capital turnover on dividends per share at 1% significance level. The study inferred from that there was no impact of the rest of internal and external variables on the dividends per share.
As a result from that, the study recommended real estate sector to focus on and analyze working capital turnover. Moreover, it recommended analyzing the changes in external and internal variables during the time to enhance the performance of real estate sector in Jordan.
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Trinh, Truong Hong, and Phan Thi Thuy Mai. "The Determinants of Corporate Liquidity in Real Estate Industry: Evidence from Vietnam." International Journal of Economics and Finance 8, no. 7 (June 23, 2016): 21. http://dx.doi.org/10.5539/ijef.v8n7p21.
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<p>This paper investigates the impact of firm size, profitability, cash flows, investment opportunities, leverage and capital expenditure on cash holding level and cash conversion cycle for 54 listed real estate companies in Vietnam stock exchange during 2010-2014. The empirical result highlights two most important variables that affect the cash holdings–profitability and capital expenditure that have strong influence on the corporate liquidity of these real estate companies. The study also indicates that policies on cash holdings and working capital investment have been affected under financially constrained conditions. The study result provides speculative motive of cash holdings as well as the emphasis of financial constraints on the adjustment of working capital investment in the real estate industry.</p>
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Sheikh, Nadeem Ahmed, Khawaja Khalid Mehmood, and Mujtaba Kamal. "Determinants of Corporate Cash Holdings: Evidence from MNCs in Pakistan." Review of Economics and Development Studies 4, no. 1 (June 1, 2018): 71–78. http://dx.doi.org/10.26710/reads.v4i1.282.
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The purpose of this article is to investigate whether firm-specific variables (i.e. size, growth opportunities, profitability, capital expenditures, leverage, dividends, cash flow and working capital) affect the cash holdings of MNCs. Moreover, to investigate whether theories relevant to cash holdings provide any justification to narrate the cash holding behavior of listed MNCs on Pakistan Stock Exchange (PSX) for the period 2006-2016. Results indicate that profitability positively impacts cash holdings. Firm size positively impacts cash holdings in pooled Ordinary Least Squares, while it negatively impacts cash holdings in the fixed effects method; however the relationship is insignificant. Leverage, growth opportunities, dividends, working capital ratio and capital expenditures are significant and negatively related to corporate cash holdings. Finally, cash flows are unrelated to cash holdings. In short, results indicate that firm-specific variables significantly affect the cash holdings of MNCs. Moreover, (+/-) coefficients of different explanatory variables indicate that theories relevant to cash holdings provide some support to explain the cash holding behavior of MNCs in an emerging economy - Pakistan.
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Singh, Khujan, Poonam Rani, and Chand Kiran. "Relationship Between Various Determinants and Dimensions of Financial Literacy Among Working Class." International Journal of Financial Research 11, no. 5 (September 22, 2020): 319. http://dx.doi.org/10.5430/ijfr.v11n5p319.
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The purpose of this empirical research work was to identify the relationship between various determinants of Financial Literacy among the working class of National Capital Region of India. It was a descriptive study based on the survey of 596 working class respondents. The data has been analyzed by factor analysis, correlation and regressions analysis. Based on the factor analysis, three factors have been found of financial knowledge, three factors of financial behaviour and in a similar manner four factors of financial attitude have been extracted. Further, based on the multiple regression models the contribution of financial attitude has been found highest in explaining the financial literacy and it has been followed by financial behaviour and financial knowledge. It means that both financial attitude and financial behaviour are better estimators of financial literacy in comparison to the financial knowledge. Therefore, the policy makers, financial system regulators and governments should do more efforts to improve the level of financial attitude and financial behaviour in comparison to the financial knowledge to improve the level of financial literacy because significant difference has been found in the level of financial attitude and financial behaviour across some of the demographic factors. The increased financial literacy would be helpful in improving the saving and investment behaviour of the public. This improved level of financial literacy of public will save the required level of capital for the capital formation for the targeted economic growth. Consequently, more employment opportunities will increase the social security in the society. Like every study, this study also have certain limitations like the universe of the study was limited to a particular geographical region i.e. National Capital Region of India, along with time and money constraints. In future similar study can be conducted by changing the target population and geographical area with a bigger sample.
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Shaikh, Ruqia, Pervaiz Ahmed Memon, Muhammad Shaique Khan, and Muhammad Usman. "Do Firms Approach the Target Working Capital Requirement? A Case of Pakistan." Journal on Innovation and Sustainability RISUS 10, no. 2 (August 16, 2019): 25–38. http://dx.doi.org/10.23925/2179-3565.2019v10i2p25-38.
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Abstract The study investigates the dynamism of working capital requirement (WCR) in non-financial firms listed on the Pakistan Stock Exchange from the period of 2007 to 2013. The purpose of this research is to analyze whether firms follow the target WCR, to estimate the speed with which firms adjust towards its target WCR and to investigate the firm-specific and macroeconomic determinants of WCR. Difference GMM technique is used to analyze the speed and determinants of WCR to avoid the problems of endogeneity and unobservable heterogeneity. The study gives evidence that there is an existence of target WCR in firms of Pakistan and firm require 1.6 years to completely adjust back to target WCR. The factors which are statistically significant in the determination of WCR are the level of economic activity in the country, operating cash flow, profitability, leverage, financial distress, and financing cost. The WCR is measured by net trade cycle of a firm.
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Malm, James, and Nilesh Sah. "Litigation risk and working capital." Managerial Finance 45, no. 1 (January 14, 2019): 88–102. http://dx.doi.org/10.1108/mf-03-2018-0129.
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Purpose The purpose of this paper is to understand the association between litigation risk and working capital management. Design/methodology/approach The authors employ four different regression techniques (OLS regressions, regressions with industry and time controls, median regressions, and Fama Macbeth regressions) to study the relation between litigation risk (contemporaneous and lagged measures) and working capital management (cash conversion cycle (CCC) and its components). The authors also conduct numerous robustness tests. Findings The authors find that high-litigation risk firms tend to have longer CCC. Decomposing CCC into days receivable outstanding, days inventory outstanding and days payable outstanding, the authors find that high-litigation risk firms have longer receivable periods, take a longer time to convert inventory to cash and do not pay their suppliers promptly. These results are robust to a series of robustness tests including using an alternate measure of working capital and accounting for firm type (high-tech vs labor intensive). Originality/value This paper contributes in several ways to the litigation and corporate finance literature. The authors identify another determinant of working capital management and document another avenue whereby legal institutions affect short-term financial decision making. The link between litigation risk and working capital management is of interest to the business community, financial economists, management and the investing public.
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Asare-Kumi, Abeku Atta, Kwasi Adjepong Darkwah, Ezekiel N. N. Nortey, and Charlotte Chapman-Wardy. "Variable Reduction and Determinants of Working Capital Management on Profits for Ghanaian Banks." European Scientific Journal, ESJ 12, no. 7 (March 30, 2016): 316. http://dx.doi.org/10.19044/esj.2016.v12n7p316.
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Today, several factors has contributed to the profitability of Banks. Data collected on these factors often has several variables. It is a non-trivial exercise to determine which of the factors that significantly influences the profits of Banks. This paper adopts the use of Principal Component Analysis (PCA) on the several variables expected to influence the working capital management on the profits of banks of the Ghana Stock Exchange (GSE). Fifteen of the several variables captured by the GSE which affect working capital management on profit were grouped into four factors using the principal component analysis. Results of the PCA identifies Convertibility factors, Risk Factor, Short term Liquidity, Operational factors, and Credit Risk factors to be the determinants of bank profits. Consequently, these factors are used to fit a linear regression model in identifying the most significant factors. Apart from credit risk factors, all the other factors were found to be significant predictors of the profit of Ghanaian banks. Investors, stakeholders, and managers of banks can use these factors to monitor and evaluate their working capital in generating profits.
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Wahyuni, Iis, Soeratno ., and Suyanto . "Determinan Cash Holdings dan Excess Value." Jurnal Ilmiah Akuntansi Kesatuan 5, no. 1 (July 16, 2018): 45–57. http://dx.doi.org/10.37641/jiakes.v5i1.17.
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This research aim to analyze the determinants of cash holdings and the excess value on manufacturing companies listed in Indonesia Stock Exchange 2011-2015 period.Model research analysis using Structural Equation Modeling (SEM). The independent variables are firm size, leverage, cash flow, net working capital and growth equity. And the dependent variable is the excess cash holdings and value. This study uses panel data from 320 observational data of companies that have been listed in the Indonesia Stock Exchange in the period 2011-2015. The results showed that 1) cash flow, net working capital have significant effect on cash holdings. 2) leverage, firm size, growth equity doesn’t have significant effect on cash holdings. 3) cash holdings have significant effect on the excess value. 4) cash flow, net working capital, leverage doesn’t have significant effect on the excess value. 5) firm size, growth equity doesn’t have significant effect on the excess value.This research aim to analyze the determinants of cash holdings and the excess value on manufacturing companies listed in Indonesia Stock Exchange 2011-2015 period.Model research analysis using Structural Equation Modeling (SEM). The independent variables are firm size, leverage, cash flow, net working capital and growth equity. And the dependent variable is the excess cash holdings and value. This study uses panel data from 320 observational data of companies that have been listed in the Indonesia Stock Exchange in the period 2011-2015. The results showed that 1) cash flow, net working capital have significant effect on cash holdings. 2) leverage, firm size, growth equity doesn’t have significant effect on cash holdings. 3) cash holdings have significant effect on the excess value. 4) cash flow, net working capital, leverage doesn’t have significant effect on the excess value. 5) firm size, growth equity doesn’t have significant effect on the excess value.This research aim to analyze the determinants of cash holdings and the excess value on manufacturing companies listed in Indonesia Stock Exchange 2011-2015 period.Model research analysis using Structural Equation Modeling (SEM). The independent variables are firm size, leverage, cash flow, net working capital and growth equity. And the dependent variable is the excess cash holdings and value. This study uses panel data from 320 observational data of companies that have been listed in the Indonesia Stock Exchange in the period 2011-2015. The results showed that 1) cash flow, net working capital have significant effect on cash holdings. 2) leverage, firm size, growth equity doesn’t have significant effect on cash holdings. 3) cash holdings have significant effect on the excess value. 4) cash flow, net working capital, leverage doesn’t have significant effect on the excess value. 5) firm size, growth equity doesn’t have significant effect on the excess value.This research aim to analyze the determinants of cash holdings and the excess value on manufacturing companies listed in Indonesia Stock Exchange 2011-2015 period.Model research analysis using Structural Equation Modeling (SEM). The independent variables are firm size, leverage, cash flow, net working capital and growth equity. And the dependent variable is the excess cash holdings and value. This study uses panel data from 320 observational data of companies that have been listed in the Indonesia Stock Exchange in the period 2011-2015. The results showed that 1) cash flow, net working capital have significant effect on cash holdings. 2) leverage, firm size, growth equity doesn’t have significant effect on cash holdings. 3) cash holdings have significant effect on the excess value. 4) cash flow, net working capital, leverage doesn’t have significant effect on the excess value. 5) firm size, growth equity doesn’t have significant effect on the excess value.This research aim to analyze the determinants of cash holdings and the excess value on manufacturing companies listed in Indonesia Stock Exchange 2011-2015 period.Model research analysis using Structural Equation Modeling (SEM). The independent variables are firm size, leverage, cash flow, net working capital and growth equity. And the dependent variable is the excess cash holdings and value. This study uses panel data from 320 observational data of companies that have been listed in the Indonesia Stock Exchange in the period 2011-2015. The results showed that 1) cash flow, net working capital have significant effect on cash holdings. 2) leverage, firm size, growth equity doesn’t have significant effect on cash holdings. 3) cash holdings have significant effect on the excess value. 4) cash flow, net working capital, leverage doesn’t have significant effect on the excess value. 5) firm size, growth equity doesn’t have significant effect on the excess value.
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Salim, M. Noor, and Muhammad Maududy Ary. "DETERMINANTS OF LIQUIDITY AND THEIR EFFECT ON FINANCIAL PERFORMANCE OF CONSTRUCTION SERVICES SOE COMPANIES." Dinasti International Journal of Economics, Finance & Accounting 1, no. 5 (December 4, 2020): 905–15. http://dx.doi.org/10.38035/dijefa.v1i5.498.
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This study aims to analyze the effect of working capital turnover, cash turnover and account receivable turnover on financial performance through mediation of company liquidity. This study takes the subject of four construction service companies in Indonesia in the period before and after the restructuring and revitalization (2011-2018). Determination of the sample is done by saturation sampling technique. Data analysis with panel data regression test through Eviews program. The results of partial data analysis show that: (1) working capital turnover has a significant effect on company liquidity, however cash turnover and account receivable turnover do not have a significant effect on company liquidity; (2) working capital turnover has a significant effect on the company’s financial performance, but cash turnover and account receivable turnover do not have a significant effect on the company’s financial performance; and (3) liquidity has no significant effect on the company’s financial performance.
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Sensini, Luca, and Maria Vazquez. "Effects of Working Capital Management on SME Profitability: Evidence from an Emerging Economy." International Journal of Business and Management 16, no. 4 (March 14, 2021): 85. http://dx.doi.org/10.5539/ijbm.v16n4p85.
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This paper's main objective was to evaluate the influence of working capital management policies on Argentine agro-industrial firms' profitability. To test our hypotheses, we analyzed a sample of 326 companies selected with a stratified random method based on an economic criterion. The data was collected through a structured questionnaire. From a methodological perspective, we used the individual determinants of working capital (DSO, DSI, DPO and CCC) as independent variables, while EBITDA represented the dependent variable. Additionally, we used leverage as a control variable. To assess the impact of individual determinants on corporate profitability, we used the dynamic panel data methodology. This approach has the advantage of controlling the unobservable effects that can influence profitability and endogeneity problems. We also checked the robustness of our results. The results offer several interesting insights. In particular, the results of the variables (DSI, DPO and CCC) showed a negative relationship with firms' profitability, suggesting that investing in inventory and requesting greater extensions from suppliers leads to additional costs that cannot offset the resulting benefits.
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Nusbantoro, Ariwan Joko, Elok Sri Utami, and Nori Alfiani Sanjaya. "THE DETERMINANTS OF PROFIT CHANGE IN MANUFACTURING COMPANIES AT THE INDONESIAN STOCK EXCHANGE." Review of Management and Entrepreneurship 2, no. 1 (September 24, 2019): 17–30. http://dx.doi.org/10.37715/rme.v2i1.950.
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This study examines the determinants of profit change of companies in the manufacturing sector listed at the Indonesia Stock Exchange. The independent variables include working capital ratio, time interest earned ratio, gross profit ratio, and firm size. The data are extracted from the companies’ financial statements covering a period from 2012 to 2015. A total of 83 companies met the sample selection criteria. Results using multiple linear regression analysis show that working capital ratio and gross profit ratio both have significant negative effect on profit change, the ratio of interest payment has no positive effect on profit change, and firm size has no significant effect on profit change.
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Fatimatuzzahra, Mias, and Retno Kusumastuti. "The Determinant of Working Capital Management of Manufacturing Companies." MIMBAR, Jurnal Sosial dan Pembangunan 32, no. 2 (December 21, 2017): 276. http://dx.doi.org/10.29313/mimbar.v32i2.1872.
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Working capital is directly related to the operations activity of the company to produce goods. To be able to properly manage its working capital, the company must determine what factors that can affect working capital. Actually, there are many factors that affect working capital management but the factors that used in this study are firm size, leverage, firm growth, cash flow, profitability, capital expenditure, and GDP. Meanwhile, working capital management is reflected by the cash conversion cycle. By taking samples at manufacturing companies listed in Indonesia Stock Exchange period of 2010 - 2014, found there are a significant effect of firm size, firm growth, cash flow, profitability, and GDP. This is due to the leverage and capital expenditure shows insignificant effect.
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Seth, Himanshu, Saurabh Chadha, and Satyendra Sharma. "Redesigning the efficiency process analysis for working capital models." Journal of Global Operations and Strategic Sourcing 13, no. 1 (July 8, 2019): 38–55. http://dx.doi.org/10.1108/jgoss-04-2019-0029.
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Purpose The purpose of this study is to get insights into working capital management (WCM) practices and the determinants of its efficiency prevailing in the Indian manufacturing sector using firm-specific as well as macro-economic variables by examining three efficiency models, i.e. cash conversion cycle (CCC), cash conversion efficiency (CCE) and net working capital level (NWCL). Design/methodology/approach The study uses panel data techniques on 1,207 firms of the Indian manufacturing sector, as well as on its nine key manufacturing industries from 2008 to 2018 for the analysis. Findings Several firm-specific variables such as net fixed asset ratio, size of the firm, profitability, firm’s growth, asset turnover ratio, age of the firm, interest rate and leverage have significant effect on WCM efficiency, whereas total assets growth rate, gross domestic product growth rate and inflation rate have insignificant effect on WCM efficiency. Research limitations/implications The study provides new empirical evidence on the short-term liquidity management of manufacturing firms prevailing in the developing countries such as India. The findings are particularly relevant in the present scenario when the liquidity levels are decelerating and there is a marked slowdown in private credit flows to the manufacturing sector due to the problem of burgeoning non-performing assets. Originality/value This study examines WCM efficiency exhaustively by incorporating both firm-specific and macro-economic variables using three efficiency measures, i.e. CCC, CCE and NWCL, results of which emerged as an answer to an efficient WCM.
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Isik, Ozcan, and Umit Firat Tasgin. "Profitability and Its Determinants in Turkish Manufacturing Industry: Evidence from a Dynamic Panel Model." International Journal of Economics and Finance 9, no. 8 (July 11, 2017): 66. http://dx.doi.org/10.5539/ijef.v9n8p66.
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Our paper empirically analyses the factors that determine the profitability of 120 manufacturing firms listed in Borsa Istanbul Stock Exchange during the period 2005-2012. Estimation results from dynamic panel data model taking into account the endogeneity of variables indicate that lagged profitability, firm size, financial risk, R&D costs, net working capital, and economic growth are the most important variables affecting firm profitability. More specifically, profitability is positively and significantly affected by past profitability, firm size in terms of total sales, net working capital, and economic growth. On the other hand, R&D costs and financial risk have a dampening effect on the profitability.
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Muntaner, Carles, John W. Lynch, Marianne Hillemeier, Ju Hee Lee, Richard David, Joan Benach, and Carme Borrell. "Economic Inequality, Working-Class Power, Social Capital, and Cause-Specific Mortality in Wealthy Countries." International Journal of Health Services 32, no. 4 (October 2002): 629–56. http://dx.doi.org/10.2190/n7a9-5x58-0dyt-c6ay.
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This study tests two propositions from Navarro's critique of the social capital literature: that social capital's importance has been exaggerated and that class-related political factors, absent from social epidemiology and public health, might be key determinants of population health. The authors estimate cross-sectional associations between economic inequality, working-class power, and social capital and life expectancy, self-rated health, low birth weight, and age- and cause-specific mortality in 16 wealthy countries. Of all the health outcomes, the five variables related to birth and infant survival and nonintentional injuries had the most consistent association with economic inequality and working-class power (in particular with strength of the welfare state) and, less so, with social capital indicators. Rates of low birth weight and infant deaths from all causes were lower in countries with more “left” (e.g., socialist, social democratic, labor) votes, more left members of parliament, more years of social democratic government, more women in government, and various indicators of strength of the welfare state, as well as low economic inequality, as measured in a variety of ways. Similar associations were observed for injury mortality, underscoring the crucial role of unions and labor parties in promoting workplace safety. Overall, social capital shows weaker associations with population health indicators than do economic inequality and working-class power. The popularity of social capital and exclusion of class-related political and welfare state indicators does not seem to be justified on empirical grounds.
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Korent, Dina. "Target adjustment model and new working capital management performance measure: Evidence from Croatia." Zbornik radova Ekonomskog fakulteta u Rijeci: časopis za ekonomsku teoriju i praksu/Proceedings of Rijeka Faculty of Economics: Journal of Economics and Business 39, no. 1 (June 30, 2021): 135–62. http://dx.doi.org/10.18045/zbefri.2021.1.135.
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The paper develops a dynamic panel model of target adjustment in order to investigate the determinants of the cash conversion cycle of companies in manufacturing, trade, and information and communication industries in the Republic of Croatia for the period 2008-2015. The emphasis is on examining the significances and the speeds of the adjustment processes of the cash conversion cycles of companies subsamples by industry and size. Due to the adjustment costs, the results show that the observed companies gradually adjust their current cash conversion cycles to the target ones. In addition, these adjustments were slow, which can be explained by the predominance of the adjustment costs over the costs of being in disequilibrium. Moreover, the results of this study indicate that the rate of adjustment varies among companies from different industries and size categories. The differences in market power allow companies to change more easily the components of the cash conversion cycle. As a result, they enable faster convergence to their target levels. Besides the lagged cash conversion cycle, tested potential determinants that significantly affect the cash conversion cycles of Croatian companies in selected industries, although with different robustness, are company size, company growth, return on assets, fixed asset investments, financial leverage and the growth of the real gross domestic product. Finally, the paper presents a new measure for working capital management performance.
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Tahir, Mohammad, and Melati Binti Ahmad Anuar. "The determinants of working capital management and firms performance of textile sector in pakistan." Quality & Quantity 50, no. 2 (February 5, 2015): 605–18. http://dx.doi.org/10.1007/s11135-015-0166-4.
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Koralun-Bereźnicka, Julia. "On the Relative Importance of Corporate Working Capital Determinants: Findings from the EU Countries." Contemporary Economics 8, no. 4 (December 28, 2014): 415–34. http://dx.doi.org/10.5709/ce.1897-9254.154.
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Tousek, Zdenek, Jana Hinke, Barbora Malinska, and Martin Prokop. "The Performance Determinants of Trading Companies: A Stakeholder Perspective." Journal of Competitiveness 13, no. 2 (June 30, 2021): 152–70. http://dx.doi.org/10.7441/joc.2021.02.09.
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This research aims to propose a model adding to the competitiveness of companies by identifying factors that determine the profitability of the selected companies (both publicly traded and unquoted private companies of all sizes). Another aim is to prove a dichotomy between the motivation of equity holders and senior lenders as far as acceptable financial leverage is concerned. The paper is innovative based on its combination of several different factors influencing corporate profitability (i.e. firm-specific effects: current ratio, labor cost ratio, working capital financing ratio, long-term financing ratio, return on sales, age of the firm; industry-specific effects and other macroeconomic effects) and by assessing determinants concerning the interests of shareholders and other stakeholders using a panel regression analysis with fixed effects. The authors prove that the determinants of the operating performance of Czech trading companies differ substantially when the performance is measured by ROA or by ROE. This clearly shows discrepancies between the equity holder interest to maximize their returns on investment and the other stakeholder interests. Specifically, the authors have found that the leverage, both in terms of working capital and long-term financing, negatively impacts returns on assets. On the other hand, it positively impacts returns for equity holders both in the Wholesale and Retail sub-samples. Interestingly, other determinants of operating performance, such as capital intensity, labor cost ratio, historical profitability, and macroeconomic variables, are of comparable significance, impacting both the ROA and ROE analyses.
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Pratap Singh, Harsh, and Satish Kumar. "Working capital management: a literature review and research agenda." Qualitative Research in Financial Markets 6, no. 2 (July 29, 2014): 173–97. http://dx.doi.org/10.1108/qrfm-04-2013-0010.
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Purpose – The purpose of this paper is to review research on working capital management (WCM) and to identify gaps in the current body of knowledge, which justify future research directions. WCM has attracted serious research attention in the recent past, especially after the financial crisis of 2008. Design/methodology/approach – Using systematic literature review (SLR) method, the present study reviews 126 articles from referred journal and international conferences published on WCM. Findings – Detailed content analysis reveals that most of the research work is empirical and focuses mainly on two aspects, impact of working capital on profitability of firm and working capital practices. Major research work has concluded that WCM is essential for corporate profitability. The major issues with prior literature are lack of survey-based approach and lack of systematic theory development study, which opens all new areas for future research. The future research directions proposed in this paper may help develop a greater understanding of determinants and practices of WCM. Practical implications – Till date, literature on classification of WCM has been almost non-existent. This paper reviews a large number of articles on WCM and provides a classification scheme in to various categories. Subsequently, various emerging trends in the field of WCM are identified to help researchers specifying gaps in the literature and direct research efforts. Originality/value – This paper contains a comprehensive listing of publications on the WCM and their classification according to various attributes. The paper will be useful to researchers, finance professionals and others concerned with WCM to understand the importance of WCM. To the best of the authors’ knowledge, no detailed SLR on this topic has previously been published in academic journals.
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Utami, Inggriyani Wilda, and Titis Puspitanigrum Dewi Kartika. "Determinants of Financial Distress in Property and Real Estate Companies." Indonesian Accounting Review 9, no. 1 (June 28, 2019): 109. http://dx.doi.org/10.14414/tiar.v9i1.1705.
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This study aims to examine the effect of financial ratios, consisting of operating capacity, quick ratio, working capital, and cash flow to sales, on financial distress. Financial distress is an interesting topic to discuss because research on this factor can predict the company’s survival. In general, financial distress can be measured by analyzing financial statements. Financial statements are very useful for the companies to find out their financial position as the results of their operations in a given period. This study used the population concerning property and real estate companies listed on the Indonesia Stock Exchange in the period 2015-2017. This study used a purposive sampling technique for getting the sample. The population consists of 99 companies that meet the criteria as stipulated for the sample selection. The analytical method used is logistic regression with a significance level of 0.05. The test results in this study indicate that operating capacity has an effect on financial distress, while quick ratio, working capital and cash flow to sales have no effect on financial distress.
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Kotova, Tatyana Vladimirovna, Elena Vladimirovna Chernikina, and Yulia Aleksandrovna Gladysheva. "Assessing impact of determinants on enterprise value in producing and processing industries." Vestnik of Astrakhan State Technical University. Series: Economics 2021, no. 3 (September 30, 2021): 117–24. http://dx.doi.org/10.24143/2073-5537-2021-3-117-124.
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The article is devoted to studying the evaluation of the determinant factors of the value of state-owned companies, which present the competitive and investment-attractive segment of the economy with high export potential. There are considered the applied aspects of the problem and the influence of financial and non-financial factors on the value of companies, such as: return on assets, return on equity, return on invested capital, leverage, earnings per share, dividends per share, company size, company age, share of fixed assets. The research hypothesis that the selected determinants are significant and affect the value of companies with state participation are examined. The analysis is based on data from public reports of Russian producing and processing companies. The sample includes the data for 2010-2019. Companies with state participation and industry affiliation were selected; a database of indicators of financial statements of selected companies was formed; the financial indicators-factors have been calculated; the relationship of factors with the resulting indicator is determined. It has been inferred that the determinants “earnings per share” and “net working capital” are statistically significant and have an impact on the enterprise value in the industry under study
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Nyeadi, Joseph Dery, Yakubu Awudu Sare, Godfred Aawaar, and David McMillan. "Determinants of working capital requirement in listed firms: Empirical evidence using a dynamic system GMM." Cogent Economics & Finance 6, no. 1 (January 1, 2018): 1558713. http://dx.doi.org/10.1080/23322039.2018.1558713.
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Comporek, Michał. "NET WORKING CAPITAL AS A DETERMINANT OF OPERATIONAL FINANCIAL SAFETY OF ENTERPRISE." Prace Naukowe Uniwersytetu Ekonomicznego we Wrocławiu, no. 484 (2017): 59–74. http://dx.doi.org/10.15611/pn.2017.484.05.
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Abu Mouamer, Faris M. "The determinants of capital structure of Palestine‐listed companies." Journal of Risk Finance 12, no. 3 (May 24, 2011): 226–41. http://dx.doi.org/10.1108/15265941111136969.
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PurposeThe purpose of this paper is to examine the relationship between capital structure and debt lifetime among listed companies in Palestine stock market.Design/methodology/approachThis study investigates firms that have been listed on the Palestine securities exchange (PSE) over a five‐year period (2000‐2004). In total, 28 companies were listed in PSE since 1999. Only 15 firms working in different economic sectors qualified to be included in the study sample according to the availability and continuity of published financial statements during the period of 2000‐2004. Variables used for the analysis include profitability, leverage ratios (total debt (TD), short‐term debt (STD) and long‐term debt (LTD)), liquidity (LQ), age, asset structure, and firm size and sales growth are also included as control variables. The panel character of the data allows for the use of panel data methodology. Panel data involves the pooling of observations on a cross‐section of units over several times.FindingsThe study has shown that the service companies have the highest TD ratio (53.69 percent), followed by industrial companies (50.86 percent), trade companies (34.11 percent) and agriculture companies (24.02 percent). The one way analysis of variance (ANOVA) shows no significant difference in the use of debt, neither total, LTD or STD among companies in the four sectors. Adding to that, ANOVA indicates insignificant differences among the companies in the sample with respect growth opportunities, size, age, tangibility (TAN), and LQ. The correlation analysis has shown that TD is positively and significantly related to TAN, on the country, no significant relationship between the long debt and STD on the one hand and age, growth, LQ, TAN, and size on the other hand.Originality/valueThis paper is the first that employs a new database containing the market and accounting data (from 2000 to 2004). This study will contribute in examining the relationship between capital structure and debt lifetime among listed companies in the Palestine stock market.
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Sharma, Gunjan, Tarika Singh, and Suvijna Awasthi. "Determinants of Trading Decision: An Experiential Examination." GIS Business 13, no. 1 (February 5, 2018): 1–9. http://dx.doi.org/10.26643/gis.v13i1.3301.
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In the midst of increasing globalization, the past two decades have observed huge inflow of outside capital in the shape of direct and portfolio investment. The increase in capital mobility is due to contact between the different economies across the globe. The growing liberalization in the capital market leads to the growth of various financial products and services. Over the past decade, the Indian capital market has witnessed numerous changes in the direction of developing the capital markets more robust. With the growing Indian economy, the larger inflow of funds has been fetched into the capital markets. The government is continuously working on investor’s education in order to increase retail participation in the Indian stock market. The habits of the risk-averse middle class have been changing where these investors started participating in the Indian stock market. It is an explored fact that human beings are irrational and considering this fact becomes imperative to investigate factors that influence the trading decisions. In this research, ‘an attempt has been made to investigate various factors that affect the individual trading decision’. The data has been collected from various stockbroking firms and from clients of those stockbroking firms their opinions were recorded by means of a questionnaire. Data collected through the structured questionnaire, 33 questions were prepared which was given to the 330 respondents on the basis of convenience sampling out of which 220 individuals filled questionnaire, the total of 200 questionnaires was included in the study after eliminating the incomplete questionnaire. Various factors are being explored from the literature and then with the help of factor analysis some of the most influential factors have been explored. Factors like overconfidence, optimism, cognitive bias, herd behavior, advisory effect, and idealism are the factors which influenced the trading decision of the investors the most. Such kind of a study is contributing in the area of behavioral finance as a trading decision is an important aspect while investing in the stock market. And this kind of study would be helping and assisting financial advisors to strategies for their clients in making the right allocation and also the policy maker and market regulators to come up with better reforms for the Indian stock markets.
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Panda, Ajaya Kumar, Swagatika Nanda, and Pradiptarathi Panda. "Working Capital Management, Macroeconomic Impacts, and Firm Profitability: Evidence from Indian SMEs." Business Perspectives and Research 9, no. 1 (June 9, 2020): 144–58. http://dx.doi.org/10.1177/2278533720923513.
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The present study investigates the relationship between working capital management and SME profitability. It also analyzes the impact of macroeconomic impulses on firm profitability through efficient management of working capital in the case of Indian small and medium scale enterprises over the time period spanning from 2010 to 2017 using Feasible Generalized Least Square (FGLS) regression models. The study concludes the negative relationship of account receivables together with a positive relationship of inventories and account payables with SME profitability. It implies the firm managers can maximize SME’s profitability by converting the credit sales to cash as early as possible, by increasing the days of accounts payable and following a conservative inventory management strategy. Changes in economic growth and commercial bank advances to small scale industries are the key macroeconomic determinants that are impacting SME profitability. The results from this paper may guide the firm managers to shape their working capital management strategies to maximize profitability. Policymakers may find the study interesting to identify the macroeconomic parameters that significantly influence Indian SMEs.
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Tahir, Muhammad, Arshad Hayat, Kashif Rashid, Muhammad Asim Afridi, and Yasir Bin Tariq. "Human capital and economic growth in OECD countries: some new insights." Journal of Economic and Administrative Sciences 36, no. 4 (June 10, 2020): 367–80. http://dx.doi.org/10.1108/jeas-07-2019-0073.
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PurposeThe new growth literature in general is very optimistic about the positive impact that human capital has on the economic growth of countries. Based on this argument, the current paper focusses to investigate the impact of different types of human capital on economic growth.Design/methodology/approachThe paper utilizes data for the period 1998 to 2017 and employs suitable econometric techniques.FindingsIt is found that it is not the stock of human capital rather its utilization in terms of average working hours that matters for higher growth. Other than human capital, trade openness and investment are positively associated with growth. On the other hand, inflation has an insignificant impact while employment level has a negative impact on growth. Moreover, for developing countries, the study also revealed that stock of human capital has negatively and average working hours has positively impacted economic growth. Finally, domestic investment and employment level appeared to be the main growth determinants in developing countries.Research limitations/implicationsPolicymakers are suggested to ensure the maximum utilization of working hours, trade openness and domestic investment in improving economic growth in OECD countries.Originality/valueThis study has visualized the impact of human capital on economic growth from a new perspective and hence would be useful for policymakers.
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Actis, Esteban. "Los condicionantes domésticos en los diseños de política exterior: la internacionalización de capitales brasileños como nuevo objetivo de la política exterior de Brasil / The domestic determinants of foreign policy designs." Brazilian Journal of International Relations 1, no. 3 (January 28, 2013): 388–423. http://dx.doi.org/10.36311/2237-7743.2012.v1n3.p388-423.
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Um aspecto novo do modelo de desenvolvimento do Brasil na primeira década do século XXI e sua inserção na economia internacional, tem sido a internacionalização do capital através da expansão de um conjunto de empresas brasileiras. Neste sentido, este artigo propõe-se analisar o impacto que teve este fenômeno à política externa de Brasil sob o governo do Presidente Lula (2003-2010) e o surgimento do que identificamos como um novo determinante para sua concepção e execução. A hipótese de trabalho é que o processo de internacionalização da capital do Brasil transforma-se em um novo objetivo da política externa do governo Lula. Desde uma qualitativa metodologia que combina fontes de informações primárias e secundárias, o artigo tenta contribuir para a análise da inserção internacional de uma potência emergente como o Brasil em plena mutação da ordem internacional. The domestic determinants of foreign policy designs: the internationalization of Brazilian capital as a new target of Brazil's foreign policyAbstract: A new aspect of the development model of Brazil in the first decade of the 21st century, and is its insertion into the international economy, has been the internationalization of capital through the expansion of a set of Brazilian corporations. In this sense, this article proposes to analyze the impact that had this phenomenon of Brazil foreign policy under the Government of President Lula (2003-2010) and the emergence what we have identified as a new determinant for its design and execution. This working hypothesis is that the process of internationalization of Brazilian capital was transformed into a new objective of the foreign policy of the Lula administration. From a qualitative methodology and combine primary and secondary information sources, the paper attempts to contribute to the analysis of the international insertion of an emerging power as Brazil in full mutation of the international order.
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Eldomiaty, Tarek, Marwa Anwar, and Ahmed Ayman. "How can firms monitor the move toward optimal working capital?" Journal of Economic and Administrative Sciences 34, no. 3 (October 9, 2018): 217–36. http://dx.doi.org/10.1108/jeas-06-2017-0056.
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Purpose The purpose of this paper is to explore the potential benefits of an optimal vs observed working capital; the latter being measured by cash conversion cycle (CCC). Optimal CCC is defined and measured as the CCC that maximizes sales in the last four quarters. The initial exploratory results show that optimal CCC has been shorter than the observed. In addition, shorter CCC is accompanied by higher return on investment. Design/methodology/approach The authors use various statistical tools to analyze the differences between determinants of observed and optimal CCC. These statistical tools include Johansen cointegration test, linearity, normality tests, cointegration regression and Granger causality. The authors also use the benefits of discriminant analysis in order to reach a Z-score model that can be used for monitoring the move from an observed to optimal working capital. Findings The results show that: significant association exists between volatility of sales and CCC; sales volatility and lagged growth of sales carry relatively the highest weights when a firm moves from observed to optimal CCC; shorter CCC is associated significantly with higher profitability; the observed CCC adjusts to an optimal level; as inflation rises causing potential rise in cost of goods sold, firms prefer staying away from optimal levels of working capital; as economic growth slows down, firms stay at the current level of observed working capital; the results are subject to industry and size effects; and the DJIA and NASDAQ listed firms adjust observed CCC to optimal level slowly. Originality/value This paper offers three advances in the literature. The first advance is that the paper determines an optimal level of working capital empirically. To the best of the authors’ knowledge up to the date of submission, other related studies did not include an empirical solution to determine optimal working capital. The second advance is that the paper develops an empirical discriminant model that can be used for monitoring firms’ move from an observed to optimal working capital. The third advance is that optimal working capital shows the empirical integration between short-term and long-term investments that results in an improvement to firm’s liquidity and profitability.
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Yakubu, Ibrahim Nandom. "The Effect of Working Capital Management on Dividend Policy: An Empirical Analysis of Listed Firms in Ghana." International Journal of Industrial Management 9 (January 5, 2021): 25–31. http://dx.doi.org/10.15282/ijim.9.0.2021.5952.
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Relying on more recent data spanning 2007-2016, this paper investigates the impact of working capital management (WCM) on dividend policy of listed non-financial firms in Ghana. Specifically, the study assesses the effect of cash conversion cycle (CCC), days inventory outstanding (DIO), profitability, and firm growth on dividend policy. Employing the ordinary least squares (OLS) analytical technique, the findings reported that working capital management (in terms of cash conversion cycle and days inventory outstanding) and dividend policy are positively related, with DIO having a significant effect on dividend policy. The results also established a positive association between the control variables (profitability and firm growth) and dividend policy albeit insignificantly. Based on the findings, the study concludes that working capital management in terms of days inventory outstanding (DIO) is a critical factor influencing firms’ dividend policy decisions. The study extends the inconclusive empirical evidence on the determinants of dividend policy and fills the lacuna in existing literature by focusing on how working capital management practices influence dividend policy of firms in Ghana. The findings are also useful to the board of directors of non-financial firms in deciding an appropriate dividend policy, and to the shareholders in making investment decisions.
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Fitim, Deari, Alija Sadri, and Valeriya V. Lakshina. ""DETERMINANTS OF PROFITABILITY: EVIDENCE FROM RUSSIAN AGRICULTURAL FIRMS"." SERIES V - ECONOMIC SCIENCES 13(62), no. 2 (December 21, 2020): 167–76. http://dx.doi.org/10.31926/but.es.2020.13.62.2.18.
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"The analysis of profitability and the factors that can influence it is of vital importance in business decision making. Thus, the purpose of this study is to examine the relationship between profitability and working capital, leverage, and net trade credit. The study is developed based on a sample of Russian firms, which operate in the agricultural sector, for the period from 2013 to 2017. The result denoted that firms were both, profitable and liquid ones, and bought more than sold on credit. Among other results, the study showed that more profitable firms operated with higher liquidity. Onward, the study suggested that firms should decrease the financial leverage ratio in order to increase profitability"