Working capital management, firm performance and macroeconomic factors: Evidence from Iran

This paper investigates the impact of working capital management (WCM) on firm performance among listed Iranian manufacturing firms, focusing on the direct and moderating roles of inflation and GDP variables. This study uses the ordinary least squares with robust standard errors to analyze panel dat...

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Autores principales:	Iman Soukhakian, Mehdi Khodakarami
Formato:	article
Lenguaje:	EN
Publicado:	Taylor & Francis Group 2019
Materias:	working capital management return on assets refined economic value added profitability cash conversion cycle macroeconomic factors Business HF5001-6182 Management. Industrial management HD28-70
Acceso en línea:	https://doaj.org/article/6b2d4c1d1b54446bb545cfbb3e789d14
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spelling	oai:doaj.org-article:6b2d4c1d1b54446bb545cfbb3e789d142021-12-02T16:09:31ZWorking capital management, firm performance and macroeconomic factors: Evidence from Iran2331-197510.1080/23311975.2019.1684227https://doaj.org/article/6b2d4c1d1b54446bb545cfbb3e789d142019-01-01T00:00:00Zhttp://dx.doi.org/10.1080/23311975.2019.1684227https://doaj.org/toc/2331-1975This paper investigates the impact of working capital management (WCM) on firm performance among listed Iranian manufacturing firms, focusing on the direct and moderating roles of inflation and GDP variables. This study uses the ordinary least squares with robust standard errors to analyze panel data covering the period 2010–2016. Two-stage least squares with robust standard errors is also used to control the endogeneity problem. The results show that the cash conversion cycle (CCC) is negatively related to return on assets and to refined economic value added (REVA). That is, the shorter time the span between an expenditure to purchase raw materials and the collection of the receivables for sold goods, the higher the performance. However, when endogeneity problem is controlled for, CCC loses its relationship to REVA. Macroeconomic variables are positively and significantly related to ROA, but only inflation is significantly related to REVA. Moreover, macroeconomic factors do not moderate the relationship between WCM and firm performance.Iman SoukhakianMehdi KhodakaramiTaylor & Francis Grouparticleworking capital managementreturn on assetsrefined economic value addedprofitabilitycash conversion cyclemacroeconomic factorsBusinessHF5001-6182Management. Industrial managementHD28-70ENCogent Business & Management, Vol 6, Iss 1 (2019)
institution	DOAJ
collection	DOAJ
language	EN
topic	working capital management return on assets refined economic value added profitability cash conversion cycle macroeconomic factors Business HF5001-6182 Management. Industrial management HD28-70
spellingShingle	working capital management return on assets refined economic value added profitability cash conversion cycle macroeconomic factors Business HF5001-6182 Management. Industrial management HD28-70 Iman Soukhakian Mehdi Khodakarami Working capital management, firm performance and macroeconomic factors: Evidence from Iran
description	This paper investigates the impact of working capital management (WCM) on firm performance among listed Iranian manufacturing firms, focusing on the direct and moderating roles of inflation and GDP variables. This study uses the ordinary least squares with robust standard errors to analyze panel data covering the period 2010–2016. Two-stage least squares with robust standard errors is also used to control the endogeneity problem. The results show that the cash conversion cycle (CCC) is negatively related to return on assets and to refined economic value added (REVA). That is, the shorter time the span between an expenditure to purchase raw materials and the collection of the receivables for sold goods, the higher the performance. However, when endogeneity problem is controlled for, CCC loses its relationship to REVA. Macroeconomic variables are positively and significantly related to ROA, but only inflation is significantly related to REVA. Moreover, macroeconomic factors do not moderate the relationship between WCM and firm performance.
format	article
author	Iman Soukhakian Mehdi Khodakarami
author_facet	Iman Soukhakian Mehdi Khodakarami
author_sort	Iman Soukhakian
title	Working capital management, firm performance and macroeconomic factors: Evidence from Iran
title_short	Working capital management, firm performance and macroeconomic factors: Evidence from Iran
title_full	Working capital management, firm performance and macroeconomic factors: Evidence from Iran
title_fullStr	Working capital management, firm performance and macroeconomic factors: Evidence from Iran
title_full_unstemmed	Working capital management, firm performance and macroeconomic factors: Evidence from Iran
title_sort	working capital management, firm performance and macroeconomic factors: evidence from iran
publisher	Taylor & Francis Group
publishDate	2019
url	https://doaj.org/article/6b2d4c1d1b54446bb545cfbb3e789d14
work_keys_str_mv	AT imansoukhakian workingcapitalmanagementfirmperformanceandmacroeconomicfactorsevidencefromiran AT mehdikhodakarami workingcapitalmanagementfirmperformanceandmacroeconomicfactorsevidencefromiran
_version_	1718384414593908736

Working capital management, firm performance and macroeconomic factors: Evidence from Iran

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