How do small business owners manage working capital in an emerging economy?

Orobia, Laura; Byabashaija, Warren; Munene, John C.; Sejjaaka, Samuel; Musinguzi, Dan

doi:10.1108/qram-02-2012-0008

Cited by 49 publications

(53 citation statements)

References 22 publications

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“…Thus NWC as used in this study refers to Net working capital, which is defined as "the difference between current assets and current liabilities" (Arnold, 2008, p. 515). This choice of definition is also consistent with many studies that examined the impact of WC management on liquidity, profitability or productivity of companies (Abosede & Luqman, 2014;Agyei & Yeboah, 2011;Lazaridis & Tryfonidis, 2006;Orobia et al, 2013;Tauringana & Afrifa, 2013).…”

Section: Concept Of Working Capital Managementsupporting

confidence: 76%

“…A relatively few studies have examined WCM in specific small scale industries such as in manufacturing, the retail sector, agriculture among others in developing countries in general, like Uganda (Orobia et al, 2013), Nigeria ( Oladipupo & Okafor, 2013), Zimbabwe ( Zawaira & Mutenheri, 2014), and Ghana"s financial industry ( Agyei & Yeboah, 2011).The findings of previous studies also show major inconsistencies in WCM and profitability relationship ( Deloof, 2003;Ganesan, 2007;Gill et al, 2010;Islam & Mili, 2012).…”

Section: Introductionmentioning

confidence: 99%

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The Impact of Working Capital Management on Profitability of Petroleum Retail Firms: Empirical Evidence from Ghana

Mbawuni¹,

Mbawuni²,

Nimako³

2016

IJEF

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The study examined the impact of working capital management (WCM) on the profitability of petroleum retail firms (PRFs) in Ghana over a six year period (2008)(2009)(2010)(2011)(2012)(2013). Audited annual reports from a sample of five selected petroleum retail firms in Ghana are employed in the study. Using, descriptive analysis, correlation and regression analysis, the results indicate that, in the PRFs in Ghana, there is favourable net working capital for the firms and a favourable networking capital to total assets ratio. The most important WCM component that drives the firm"s profitability, measured in return on assets (ROA), is average days payable (ADP). The rest of WCM components, cash conversion cycle (CCC), average days inventory (ADI) and average days receivables (ADR) did not have significant relationship with profitability. The study further found that WCM practices among the five selected PRFs support the conservative strategy of WCM, rather than an aggressive WCM strategy. Theoretical and managerial implications are discussed.

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Section: Concept Of Working Capital Managementsupporting

confidence: 76%

Section: Introductionmentioning

confidence: 99%

The Impact of Working Capital Management on Profitability of Petroleum Retail Firms: Empirical Evidence from Ghana

Mbawuni¹,

Mbawuni²,

Nimako³

2016

IJEF

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“…Thus, the barriers and performance of business start-ups and the overall contribution of the incubators that host the majority of business start-up in Kampala district were explored and reported on. Kampala was chosen because it is the commercial heartland of Uganda where most business activities, including incubators, take place (Orobia et. al., 2013).…”

Section: Methodsmentioning

confidence: 99%

Anecdotal Evidence of the Role of Incubation in the Growth of Business Start-Ups in Uganda

Tibaingana¹

2019

IBR

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Although incubation is a well-known and accepted strategy for the growth of business start-ups in Uganda, little is known about its extent. What is known is that the majority of the start-ups fail in less than one year. This study explored the role of incubators on the growth of business start-ups in Uganda. The study interviewed managers of the incubation services and business starts-ups on how they received this support. The study is qualitative and respondents were purposively selected. Key informant interviews and focus group discussions were used to capture the perceptions of the services and how the support enabled the enterprises to grow. The findings show that various services were offered to support the growth of business start-ups. The services ranged from the creation of networks to other business development services such as mentorship, coaching, and marketing. The perceptions of the owners of business start-ups were somewhat mixed because while the majority viewed the support as crucial in the growth of their start-ups, a few others said they did not. Thus, a few owners of business start-up viewed incubators as playing a limited role. The findings are pertinent for policy formulation on the role of business start-ups and for streamlining incubation support processes in emerging economies.

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“…This location was chosen because majority of stock market investors are residing there and they are easily accessible. Participants were selected using purposive sampling (Orobia, Byabashaija, Munene, Sejjaaka & Musinguzi, 2013). In this case, participants were invited using formal invitation letter and then a convenient day and time were communicated to the researcher, who then visited the interviewees as scheduled.…”

Section: Methodsmentioning

confidence: 99%

A qualitative inquiry into the investment decision behaviour of the Malaysian stock market investors

Jaiyeoba

Haron

2016

QRFM

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Purpose The main purpose of this study was to examine the investment decision behaviour of retail investors in Malaysia. Design/methodology/approach The study adopted semi-structured interviews to solicit an understanding of six retail investors on investment decision behaviour in Malaysia. Content analysis technique was used to analyse the data and verbatim texts were applied in discussing the emergent themes. Findings The findings indicate that retail investors in Malaysia are patriotic in nature, and their investment decisions are based on feeling of comfort or convention rather than quantitative analysis. They rely so much on their findings rather than third party’s views for making investment decisions. They were influenced by the psychological biases because they herd on the information. Challenges are solved through experience, and they believe that proper understanding of the financial and economic settings of the country can enhance better investment decision-making. Research limitations/implications A more detailed investigation on the investors’ behaviour with more samples may expand our understanding of this issue. Future studies need to examine the investment decision behaviour with more samples. Practical implications First, it will prepare hit and run investors to be more ready to remain in the market and improve their skills on how to make sound investment decisions. Second, it helps the investors to know that knowledge of traditional finance theory is not sufficient to excel in stock market, and, hence, they need to know more about behavioural finance. Third, investors are exposed to various reasons as to why investment decisions deviate from expected and different means of solving the challenges faced in making investment decision within the Malaysian context. Fourth, investors are reminded that understanding the financial settings before investing is essential. Finally, policy makers in stock market are able to understand the retail investors’ behaviour. Originality/value This study examines the experience and prospect to remain as stock market investors, their priorities in selecting the right company for investment purposes, the kind of information seeking from third parties, the challenges faced by them and other important considerations in investment decisions. These have never been examined together in this way in investigation of retail investors’ investment behaviour.

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How do small business owners manage working capital in an emerging economy?

Cited by 49 publications

References 22 publications

The Impact of Working Capital Management on Profitability of Petroleum Retail Firms: Empirical Evidence from Ghana

The Impact of Working Capital Management on Profitability of Petroleum Retail Firms: Empirical Evidence from Ghana

Anecdotal Evidence of the Role of Incubation in the Growth of Business Start-Ups in Uganda

A qualitative inquiry into the investment decision behaviour of the Malaysian stock market investors

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