IDEAS home Printed from https://ideas.repec.org/a/now/jnlrcf/114.00000073.html
   My bibliography  Save this article

The Influence of Country-level Social Capital on Firms’ Cash Conversion Cycle

Author

Listed:
  • Nana Twum Owusu-Peprah

Abstract

First, I examine the influence of country-level social capital on the cash conversion cycle. Consistent with moral hazard theory, social safety networks, and strong relationships among societal members that make up the social capital of a region, I find a positive association between social capital and the cash conversion cycle. In addition, I show that corporate risk-taking measures and the cost of capital mediate this relationship. I find unconstrained firms increase their cash conversion cycle days longer than constrained firms. Additionally, I show that corporate risk-taking and cost of capital are the transmission channels. Using data from 22 countries from 2007 to 2021, the results remain unchanged after controlling for firm and country characteristics, using a linear mixed model, and addressing endogeneity problems via instrumental variables. Also, the results still hold even after eliminating shocks like the 2007–2009 global financial crisis and the 2020–2021 COVID crisis from the sample period.

Suggested Citation

  • Nana Twum Owusu-Peprah, 2025. "The Influence of Country-level Social Capital on Firms’ Cash Conversion Cycle," Review of Corporate Finance, now publishers, vol. 5(1–2), pages 245-277, March.
    • Handle: RePEc:now:jnlrcf:114.00000073
    DOI: 10.1561/114.00000073
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1561/114.00000073
    Download Restriction: no
    File URL: https://libkey.io/10.1561/114.00000073?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:now:jnlrcf:114.00000073. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Lucy Wiseman (email available below). General contact details of provider: http://www.nowpublishers.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.