How does working capital management affect the profitability of Indian companies?

被引：41

作者：

Altaf, Nufazil ^{[1
]}

Shah, Farooq Ahmad ^{[2
]}

机构：

[1] Cent Univ Kashmir, Dept Management Studies, Srinagar, Jammu & Kashmir, India

[2] Dept Cent Univ Kashmir, Srinagar, Jammu & Kashmir, India

来源：

JOURNAL OF ADVANCES IN MANAGEMENT RESEARCH | 2018年 / 15卷 / 03期

关键词：

India; Firm profitability; Working capital management; Panel data;

D O I：

10.1108/JAMR-06-2017-0076

中图分类号：

C93 [管理学];

学科分类号：

12 ; 1201 ; 1202 ; 120202 ;

摘要：

Purpose The purpose of this paper is to examine the relationship between working capital management (WCM) and firm profitability for a sample of 437 non-financial Indian companies. Design/methodology/approach The study is based on secondary financial data obtained from Capitaline database, pertaining to a period of ten years. This study employs two-step generalized method of moments (GMM) techniques to arrive at results. Findings The results of the study confirm the inverted U-shape relationship between WCM and firm profitability. In addition, the authors also found that the firms should complete its CCC on an average by 63 days. Originality/value Unlike prior studies that found a linear relationship between WCM and firm profitability. This study provides newer evidence for an inverted U-shaped relation between investment in working capital and firm profitability in India. In addition, this study uses GMM to control the potential problems of endogeneity.

引用

页码：347 / 366

页数：20

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