Working capital management in Chinese firms: an empirical investigation of determinants and adjustment towards a target level using dynamic panel data model

Rehman, Ajid Ur; Wang, Man; Kabiraj, Sajal

doi:10.1504/aajfa.2017.082930

Cited by 13 publications

(29 citation statements)

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“…They can also hold lower current assets and meet cash needs more easily due to their ability to borrow quickly and under affordable conditions (Moss and Stine, 1993). In this regard, Abbadi and Abbadi (2013), Cuong and Nhung (2017), Gill (2011), Rehman et al (2017) and Wasiuzzaman and Arumugam (2013) reported a negative relationship between WCR and firm size. Consequently, we expect a negative association between firm size and WCR.…”

Section: Hypotheses Developmentmentioning

confidence: 92%

“…In exploring the determinants of WCR in emerging markets, Çetenak et al (2017) used a sample of 1,253 industrial firms operating in 14 emerging countries and showed that WCR is affected by firm characteristics, industry and country-level factors. In the same context, Rehman et al (2017) employed a two-step GMM estimator to analyze the determinants of WCR and the time taken by Chinese firms to adjust their WCM policies. The results of a sample of 760 Chinese listed firms showed that WCR is positively affected by profitability and growth opportunities, whereas firm size, asset tangibility, operating cash flow, economic conditions, board size, board independence and leverage are all found to be negatively associated with WCR.…”

Section: Literature Reviewmentioning

confidence: 99%

“…In turn, higher-performance firms are expected to keep their working capital at lower levels (Narender et al , 2008). However, the vast majority of earlier studies reported a highly significant positive relationship between firm performance and its WCR (Abbadi and Abbadi, 2013; Al-Talab et al , 2010; Chiou et al , 2006; Cuong and Nhung, 2017; Narender et al , 2008; Nazir and Afza, 2009; Rehman et al , 2017; Saarani and Shahadan, 2012; Wiguna and Wasistha, 2017). Consequently, we expect a positive association between firm performance and WCR.…”

Section: Hypotheses Developmentmentioning

confidence: 99%

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Determinants of working capital behavior: evidence from Egypt

Moussa

2019

IJMF

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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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Section: Hypotheses Developmentmentioning

confidence: 92%

Section: Literature Reviewmentioning

confidence: 99%

Section: Hypotheses Developmentmentioning

confidence: 99%

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Determinants of working capital behavior: evidence from Egypt

Moussa

2019

IJMF

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“…Particularly, in the previous decade, the issue seems to be still a hot topic for the contemporary researchers. Williams (2011), Ayanda et al (2013), Raharjo et al (2014), Bateni et al (2014), Shingjergji and Hyseni (2015), Olarewaju and Akande (2016), Khasawneh and Staytieh (2017), Rehman et al (2017) have all examined the issue in different operation economies. There is therefore no gainsaying the fact that there are a couple of researches that have provided evidence of capital adequacy in other countries.…”

Section: Capital Adequacy Determinantmentioning

confidence: 99%

The determinant of capital adequacy ratio: empirical evidence from Vietnamese banks (a panel data analysis)

Anh

Minh

2020

AAJFA

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The purpose of this study is to investigate the determinant of Vietnamese banks' capital adequacy ratio (CAR) by internal banking factors. Secondary data is collected from banks' annual reports in the period of 2009-2015. FGLS method and panel data are used to examine a regression model with CAR is the dependent variable and five independent variables: bank size (SIZE), loans (LOA), loan loss reserve (LLR), liquidity (LIQ), profitability (ROE). The results show that SIZE and LIQ impact negatively on CAR with significant meanings. On the other hand, LLR and LOA also affect CAR negatively but they are insignificant.

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“…Conglomerates, especially in the building market, can do a large amount of business with a little bit of equity. Leveraging working capital (Sainani et al, 2017;Rehman et al, 2017;Khoo et al, 2017;Tao et al, 2017;Kucséber, 2016) or leveraging equity (Zhao, 2017;Salvi et al, 2018) is what we mean by "leverage" in the industry. Workforce issues represent an industrywide problem that is becoming more and more critical to the success of an industry firm.…”

Section: What Causes Large and Historically Successful Conglomerates mentioning

confidence: 99%

A Causal Analysis of Conglomerate Bankruptcies

KU¹,

WHANG²

2020

Int Convergence Manag Assoc

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Purpose-Strategic causes for the failure include unrealistic growth, overexpansion, unfamiliar new markets, volume obsession, unrealistic promises and poor project selection. Organizational causes are insufficient capital and profits, lack of business knowledge, poor financial management, poor sales skills, inadequate marketing, poor leadership, poor leadership transfer, project losses, poor field performance and owner bankruptcy. Uncontrollable causes include industry and economic weakness and banking and surety changes. While helpful, the list provides insufficient clarity regarding the causal roots of failure. Research design, data and methodology-The research framework to organize the information involved with many of the recent and large failures in the industry. Results-This research then identified five dominant root causes-excessive egoism, poor strategic leadership, too much change, loss of discipline and inadequate capitalization. Conclusion-Finally, additional input from external forces may accelerate the firm's pace to failure. It is important on the development of diagnostic tools that are based on this model and that will provide new ways to assess a conglomerate's level of risk for incurring a financial crisis.

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Working capital management in Chinese firms: an empirical investigation of determinants and adjustment towards a target level using dynamic panel data model

Cited by 13 publications

References 0 publications

Determinants of working capital behavior: evidence from Egypt

Determinants of working capital behavior: evidence from Egypt

The determinant of capital adequacy ratio: empirical evidence from Vietnamese banks (a panel data analysis)

A Causal Analysis of Conglomerate Bankruptcies

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