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Effect of Working Capital Management on Firm Performance: The Role of Ownership Structure

Author

Listed:
  • Shams ur Rahman

    (Assistant Professor,)

  • Khurshed Iqbal

    (Assistant Professor,)

  • Aamir Nadeem

    (Assistant Professor,)

Abstract

Current study investigates the effect of working capital management on firm performance with the moderating role of ownership structure. A random sample of 77 firms for the period 2011-2015 was selected. By using fixed effect model the study demonstrated statistically significant negative relationship of leverage, average collection period and quick ratio on firm performance, while current ratio, account payable and inventory turnover found with positive significant effect on Firm Performance. Further, the effect of working capital on firm performance was positively affected by Institutional ownership and negatively affected by Managerial ownership. Thus, the results suggest that the owner/manager needs to manage their limited resources efficiently for the improvement of profitability. It is also advised that investor and shareholder pay attention to the level of institutional and managerial ownership at the time of investment..

Suggested Citation

  • Shams ur Rahman & Khurshed Iqbal & Aamir Nadeem, 2019. "Effect of Working Capital Management on Firm Performance: The Role of Ownership Structure," Global Social Sciences Review, Humanity Only, vol. 4(1), pages 108-119, March.
    • Handle: RePEc:gss:journl:v:4:y:2019:i:1:p:108-119
    DOI: 10.31703/gssr.2019(IV-I).10
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    Citations

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    Cited by:

    1. LAMBE, Isaac, Ph.D & ORBUNDE, Bemshima, Ph.D & TION, Williams A. & HARUNA, Dzugwahi, 2022. "Moderating Role of Managerial Ownership on the Effect of Cash Conversion Cycle and Receivable to Payable ratio on Firm Performance in Listed Industrial and Consumer Goods Companies in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 6(11), pages 868-880, November.

    More about this item

    Keywords

    Working Capital Management; Firm Performance; Ownership Structure;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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