IDEAS home Printed from https://ideas.repec.org/a/oap/ijaefa/v14y2022i2p137-151id691.html
   My bibliography  Save this article

Working Capital Management and Stock Performance: Evidence from an Emerging Market

Author

Listed:
  • Lloyd Blenman
  • Hung T Pham
  • Tu V Dao
  • Ben Le

Abstract

Previous research found a negative relationship between net working capital (NWC) and firm risk without accounting for investor protection. Bangladesh is different. We find a positive relationship between NWC and firm risk in an environment with weak governance and lax protection of property rights. Higher NWC must maintain to balance firm risk. Financial reporting quality (FRQ), liquidity risk, revenue uncertainty and weak capital market access have impact on firm risk. Poor FRQ adversely affects cost of capital and also limited financing choice. Changes in NWC have a significant impact on stock performance in firms with slower sales growth and less access to external capital. Our finding’s reliability is supported by both the fixed-effects panel and GMM regressions. The results have implications for Bangladeshi investors and firm managers as well as for other emerging markets with limited capital market access, high cost of bank debt and weak enforcement of property rights.

Suggested Citation

  • Lloyd Blenman & Hung T Pham & Tu V Dao & Ben Le, 2022. "Working Capital Management and Stock Performance: Evidence from an Emerging Market," International Journal of Applied Economics, Finance and Accounting, Online Academic Press, vol. 14(2), pages 137-151.
    • Handle: RePEc:oap:ijaefa:v:14:y:2022:i:2:p:137-151:id:691
    as

    Download full text from publisher

    File URL: http://onlineacademicpress.com/index.php/IJAEFA/article/view/691/689
    Download Restriction: no
    File URL: http://onlineacademicpress.com/index.php/IJAEFA/article/view/691/696
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Andini Nurul Aini & Citra Sukmadilaga & Erlane K. Ghani, 2023. "Green Bonds, Investor Attention and Stock Market Reaction: Evidence from ASEAN Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 13(6), pages 334-343, November.

    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:oap:ijaefa:v:14:y:2022:i:2:p:137-151:id:691. 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: Heather Rothman (email available below). General contact details of provider: http://onlineacademicpress.com/index.php/IJAEFA/ .

    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.