Managing working capital efficiency in Turkish agribusinesses and the impact of globalization: insights from an emerging market

Abstract

The efficiency of working capital is a major determinant of firm profitability. So, the grasp of working capital dynamics is extremely important for managers, but also for policy makers, since inefficient working capital management is an important source of industrial sickness. This study focuses on the profitability impacts of working capital policies of Turkish agribusinesses, and aims to investigate the potential effects of globalization on these interrelated relationships. The findings obtained from pooled panel analyses demonstrate that Turkish agribusinesses can enhance their profitability and value by adopting a conservative working capital policy through lengthening the cash conversion cycle up to an optimal level. Besides, globalization is found to deteriorate their efficiency and profitability where economic globalization seems to have the highest impact raising questions on the effectiveness of Turkish agribusinesses in coping with competition. Thus, both the managers and the policy makers should concern with the competitiveness impacts of globalization.

Working capital management in the food and beverage industry: Evidence from listed European companies

“…While some authors have suggested the existence of a negative relationship (Aytac et al 2020;Fernández-López et al 2020;Sensini and Vazquez 2021), others have revealed a positive relationship (Lyroudi and Lazaridis 2000;Thapa 2013;Akdoğan and Dinç 2019), and some have suggested that there is no significant relationship between these two variables (Rey-Ares et al 2021). Nurein et al (2015) stated that there is an inverted U-shaped relationship between profitability and ccc.…”

“…; Mabandla and Makoni 2019; Gołaś 2020; Rey-Ares et al 2021) (calculated as the current assets divided by current liabilities); salesgr -sales growth (Deloof 2003; García-Teruel and Martínez-Solano 2007; Ademola 2014; Pais and Gama 2015; Aytac et al 2020; Fernández-López et al 2020; Gołaś 2020) (calculated as the difference in total sales from the previous year); debtratio(Ademola 2014;Baños-Caballero et al 2014;Nurein et al 2015;Pais and Gama 2015;Akdoğan and Dinç 2019;Aytac et al 2020;Fernández- López et al 2020;Rey-Ares et al 2021;Sensini and Vazquez 2021…”

Facility and Technological Supports, and Information Transparancy to Improve the Success of a Contract Farming between Farmers Group and Company

“…All plans that would be carried out in the contract farming were prepared by involving PT Bloom Agro, Bangkit Merbabu Farmers Group and Extension Officers based on the capabilities of each party, both members of the Bangkit Merbabu Farmers Group and PT Bloom Agro. Akdogan & Dinc (2019) defines organizing as the whole process of grouping people, tools, tasks, responsibilities and authorities into a single unit in order to achieve a predetermined goal. The success of the contract farming in terms of organization is achieved because in the implementation of the contract farming, the production sector, quality control (QC) sector, packaging sector and product storage sector worked together to assist the smooth implementation of the contract farming.…”

Does working capital management improve financial performance in China’s agri-food sector during COVID-19? A comparison with the 2008 financial crisis

“…The need for efficient WCM in both crisis and normal periods has been demonstrated in previous studies in developing countries [26,27]. Since China is among the few countries that had successfully control COVID-19, we aim to fill this gap by examining the WC-financial performance relationship in China's agri-food sector during both COVID-19 and the financial crisis of 2008.…”