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Working Capital and Financial Performance in the Energy Sector of Saudi Arabia: Moderating Role of Leverage

Author

Listed:
  • Abdul Rahman Shaik

    (College of Business Administration, Prince Sattam Bin Abdulaziz University, Al Kharj, Saudi Arabia.)

  • Anis Ali

    (College of Business Administration, Prince Sattam Bin Abdulaziz University, Al Kharj, Saudi Arabia)

  • Ibtisam Dhuwayhi Alanazi

    (College of Business Administration, Prince Sattam Bin Abdulaziz University, Al Kharj, Saudi Arabia)

Abstract

The current study examines the effect of working capital (measured in terms of current ratio) on firm performance in the listed firms of Saudi Arabian energy sector during the period starting from 2012 to 2019. A pooled and panel data model was used to analyze the extracted data. The findings indicate that working capital has a considerable beneficial impact on company performance and that leverage has a significant negative impact. Even after moderating by an interaction variable, working capital still has a substantial negative influence on corporate performance.

Suggested Citation

  • Abdul Rahman Shaik & Anis Ali & Ibtisam Dhuwayhi Alanazi, 2023. "Working Capital and Financial Performance in the Energy Sector of Saudi Arabia: Moderating Role of Leverage," International Journal of Energy Economics and Policy, Econjournals, vol. 13(3), pages 158-163, May.
    • Handle: RePEc:eco:journ2:2023-03-19
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    References listed on IDEAS

    as
    1. Hany Abdel-Latif & Rehab A. Osman & Heba Ahmed, 2018. "Asymmetric impacts of oil price shocks on government expenditures: Evidence from Saudi Arabia," Cogent Economics & Finance, Taylor & Francis Journals, vol. 6(1), pages 1512835-151, January.
    2. Moayad H. Al Rasasi* & John H. Qualls & Bander K. Algamdi, 2019. "Oil Revenues and Economic Growth in Saudi Arabia," International Journal of Economics and Financial Research, Academic Research Publishing Group, vol. 5(3), pages 49-55, 03-2019.
    3. Nasser A. Alsulayhim, 2019. "The Relationship between Working Capital Management and Profitability," International Business Research, Canadian Center of Science and Education, vol. 12(8), pages 142-152, August.
    4. Khaled Salmen Aljaaidi & Waddah Kamal Hassan, 2020. "Energy Industry Performance in Saudi Arabia: Empirical Evidence," International Journal of Energy Economics and Policy, Econjournals, vol. 10(4), pages 271-277.
    5. Yusuf Opeyemi Akinwale, 2018. "An Empirical Analysis of Short Run and Long Run Relationships between Energy Consumption, Technology Innovation and Economic Growth in Saudi Arabia," International Journal of Energy Economics and Policy, Econjournals, vol. 8(4), pages 139-146.
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    More about this item

    Keywords

    Working capital; firm performance; leverage; moderation; energy sector;
    All these keywords.

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L71 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Hydrocarbon Fuels
    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General

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