IDEAS home Printed from https://ideas.repec.org/a/spr/snopef/v4y2023i2d10.1007_s43069-023-00217-4.html
   My bibliography  Save this article

Evaluating the Super-Efficiency of Working Capital Management Using Data Envelopment Analysis: Does COVID-19 Matter?

Author

Listed:
  • Ahmed Mohamed Habib

    (Independent Accounting and Finance Researcher, Independent Research)

  • Umar Nawaz Kayani

    (Al-Ain University)

Abstract

This study evaluates the working capital management (WCM) super-efficiency in UAE firms and determines how the COVID-19 crisis may affect WCM super-efficiency from a statistical perspective. Data envelopment analysis (DEA), difference tests, and Tobit regression techniques are used. Integration of DEA with Tobit regression is required to recognize the potential statistical consequence of COVID-19 on the super-efficiency of WCM. The results show that WCM super-efficiency is moderate and requires decision-makers' corrective measures to attain best practices. The study results show no significant difference in WCM super-efficiency, and COVID-19 does not significantly influence WCM super-efficiency. The results would rouse decision-makers' interests, who would look into the firm's efficiency and weak spots. They would then take major steps to improve efficiency and achieve the best practices. Stakeholders such as managers, financiers, and investors may need these results to monitor how firms manage their assets and liabilities. We contribute to the literature by investigating and evaluating firms' WCM super-efficiency pre and post the COVID-19 pandemic employing a unique technique based on DEA super-efficiency and examining whether COVID-19 has affected WCM super-efficiency to extend the scope of knowledge and stressing the importance of sound WCM, especially in periods of economic distress.

Suggested Citation

  • Ahmed Mohamed Habib & Umar Nawaz Kayani, 2023. "Evaluating the Super-Efficiency of Working Capital Management Using Data Envelopment Analysis: Does COVID-19 Matter?," SN Operations Research Forum, Springer, vol. 4(2), pages 1-20, June.
  • Handle: RePEc:spr:snopef:v:4:y:2023:i:2:d:10.1007_s43069-023-00217-4
    DOI: 10.1007/s43069-023-00217-4
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s43069-023-00217-4
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.

    File URL: https://libkey.io/10.1007/s43069-023-00217-4?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
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Muhammad Ahmad & Rabia Bashir & Hamid Waqas, 2022. "Working capital management and firm performance: are their effects same in covid 19 compared to financial crisis 2008?," Cogent Economics & Finance, Taylor & Francis Journals, vol. 10(1), pages 2101224-210, December.
    2. Chisti Khalid Ashraf, 2012. "The Relationship between Working Capital Efficiency and Profitability," Advances In Management, Advances in Management, vol. 5(12), December.
    3. Yaser Mohd Hamshari & Mohammad Ahmad Alqam & Haitham Yousef Ali, 2022. "The impact of the corona epidemic on working capital management for jordanian companies listed on the amman stock exchange," Cogent Economics & Finance, Taylor & Francis Journals, vol. 10(1), pages 2157541-215, December.
    4. Hakim Lyngstadaas, 2020. "Packages or systems? Working capital management and financial performance among listed U.S. manufacturing firms," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 31(4), pages 403-450, December.
    5. Chisti Khalid ASHRAF, 2012. "The relationship between working capital efficiency and profitability," The Journal of Accounting and Management, Danubius University of Galati, issue 3, pages 21-45, December.
    6. Ding, Wenzhi & Levine, Ross & Lin, Chen & Xie, Wensi, 2021. "Corporate immunity to the COVID-19 pandemic," Journal of Financial Economics, Elsevier, vol. 141(2), pages 802-830.
    7. Vera Fiador, 2016. "Does corporate governance influence the efficiency of working capital management of listed firms," African Journal of Economic and Management Studies, Emerald Group Publishing Limited, vol. 7(4), pages 482-496, December.
    8. Grzegorz Zimon & Hossein Tarighi, 2021. "Effects of the COVID-19 Global Crisis on the Working Capital Management Policy: Evidence from Poland," JRFM, MDPI, vol. 14(4), pages 1-17, April.
    9. Mohammad Tahir & Melati Anuar, 2016. "The determinants of working capital management and firms performance of textile sector in pakistan," Quality & Quantity: International Journal of Methodology, Springer, vol. 50(2), pages 605-618, March.
    10. Laurie A. Garrow & Virginie Lurkin & Lavanya Marla, 2022. "Airline OR Innovations Soar During COVID-19 Recovery," SN Operations Research Forum, Springer, vol. 3(1), pages 1-20, March.
    11. Amr Ahmed Moussa, 2018. "The impact of working capital management on firms’ performance and value: evidence from Egypt," Journal of Asset Management, Palgrave Macmillan, vol. 19(4), pages 259-273, July.
    12. Peng, Juan & Zhou, Zhili, 2019. "Working capital optimization in a supply chain perspective," European Journal of Operational Research, Elsevier, vol. 277(3), pages 846-856.
    13. Greg Filbeck & Xin Zhao & Ryan Knoll, 2017. "An analysis of working capital efficiency and shareholder return," Review of Quantitative Finance and Accounting, Springer, vol. 48(1), pages 265-288, January.
    14. Hashem Valipour & Ali Jamshidi, 2012. "Determining the Optimal Efficiency Index of Working Capital Management and its Relationship with Efficiency of Assets in Categorized Industries: Evidence from Tehran Stock Exchange (TSE)," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 2(2), pages 1-9.
    15. Tone, Kaoru, 2002. "A slacks-based measure of super-efficiency in data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 143(1), pages 32-41, November.
    16. Anna Nagurney, 2021. "A Multiperiod Supply Chain Network Optimization Model with Investments in Labor Productivity Enhancements in an Era of COVID-19 and Climate Change," SN Operations Research Forum, Springer, vol. 2(4), pages 1-22, December.
    17. Tarek Ben Hassen, 2022. "The GCC Economies in the Wake of COVID-19: Toward Post-Oil Sustainable Knowledge-Based Economies?," Sustainability, MDPI, vol. 14(18), pages 1-18, September.
    18. Ahmed Mohamed Habib & Nahia Mourad, 2022. "Analyzing the Efficiency of Working Capital Management: a New Approach Based on DEA-Malmquist Technology," SN Operations Research Forum, Springer, vol. 3(3), pages 1-20, September.
    19. Tone, Kaoru, 2001. "A slacks-based measure of efficiency in data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 130(3), pages 498-509, May.
    20. Anna Nagurney & Pritha Dutta, 2021. "A Multiclass, Multiproduct Covid-19 Convalescent Plasma Donor Equilibrium Model," SN Operations Research Forum, Springer, vol. 2(3), pages 1-30, September.
    21. William W. Cooper & Lawrence M. Seiford & Kaoru Tone, 2007. "Data Envelopment Analysis," Springer Books, Springer, edition 0, number 978-0-387-45283-8, October.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Ahmed Mohamed Habib & Umar Nawaz Kayani, 2024. "Price reaction of global economic indicators: evidence from the COVID-19 pandemic and the Russia–Ukraine conflict," SN Business & Economics, Springer, vol. 4(1), pages 1-21, January.
    2. Subhash Karmakar & Gautam Bandyopadhyay & Jayanta Nath Mukhopadhyay, 2024. "Systemic Risk in Indian Financial Institutions: A Probabilistic Approach," Asia-Pacific Financial Markets, Springer;Japanese Association of Financial Economics and Engineering, vol. 31(3), pages 579-656, September.
    3. Umar Nawaz Kayani & Roohi Mumtaz & Mochammad Fahlevi & Hassan Nasseredine & Acep Hadinata, 2024. "Unbridling the Economic Growth and Environmental Nexus in Pakistan," International Journal of Energy Economics and Policy, Econjournals, vol. 14(1), pages 488-495, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ahmed Mohamed Habib & Tamanna Dalwai, 2024. "Does the Efficiency of a Firm’s Intellectual Capital and Working Capital Management Affect Its Performance?," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 3202-3238, March.
    2. Gómez-Calvet, Roberto & Conesa, David & Gómez-Calvet, Ana Rosa & Tortosa-Ausina, Emili, 2014. "Energy efficiency in the European Union: What can be learned from the joint application of directional distance functions and slacks-based measures?," Applied Energy, Elsevier, vol. 132(C), pages 137-154.
    3. Ahmed Mohamed Habib & Nahia Mourad, 2022. "Analyzing the Efficiency of Working Capital Management: a New Approach Based on DEA-Malmquist Technology," SN Operations Research Forum, Springer, vol. 3(3), pages 1-20, September.
    4. Vicente J. Bolós & Rafael Benítez & Vicente Coll-Serrano, 2023. "Continuous models combining slacks-based measures of efficiency and super-efficiency," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 31(2), pages 363-391, June.
    5. Berger, Michael & Sommersguter-Reichmann, Margit & Czypionka, Thomas, 2020. "Determinants of soft budget constraints: how public debt affects hospital performance in Austria," LSE Research Online Documents on Economics 116865, London School of Economics and Political Science, LSE Library.
    6. Kaoru Tone, 2015. "SBM variations revisited," GRIPS Discussion Papers 15-05, National Graduate Institute for Policy Studies.
    7. Irena Lacka & Lukasz Brzezicki, 2021. "The Efficiency and Productivity Evaluation of National Innovation Systems in Europe," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 3), pages 471-496.
    8. Necmi Kemal Avkiran, 2017. "An illustration of multiple-stakeholder perspective using a survey across Australia, China and Japan," Annals of Operations Research, Springer, vol. 248(1), pages 93-121, January.
    9. Martín-Gamboa, Mario & Dias, Ana Cláudia & Iribarren, Diego, 2022. "Definition, assessment and prioritisation of strategies to mitigate social life-cycle impacts across the supply chain of bioelectricity: A case study in Portugal," Renewable Energy, Elsevier, vol. 194(C), pages 1110-1118.
    10. Berger, Michael & Sommersguter-Reichmann, Margit & Czypionka, Thomas, 2020. "Determinants of soft budget constraints: How public debt affects hospital performance in Austria," Social Science & Medicine, Elsevier, vol. 249(C).
    11. Halická, Margaréta & Trnovská, Mária, 2021. "A unified approach to non-radial graph models in data envelopment analysis: common features, geometry, and duality," European Journal of Operational Research, Elsevier, vol. 289(2), pages 611-627.
    12. Carlucci, Fabio & Corcione, Carlo & Mazzocchi, Paolo & Trincone, Barbara, 2021. "The role of logistics in promoting Italian agribusiness: The Belt and Road Initiative case study," Land Use Policy, Elsevier, vol. 108(C).
    13. Avkiran, Necmi K., 2011. "Association of DEA super-efficiency estimates with financial ratios: Investigating the case for Chinese banks," Omega, Elsevier, vol. 39(3), pages 323-334, June.
    14. Iribarren, Diego & Martín-Gamboa, Mario & Dufour, Javier, 2013. "Environmental benchmarking of wind farms according to their operational performance," Energy, Elsevier, vol. 61(C), pages 589-597.
    15. Chen, Chien-Ming, 2013. "Super efficiencies or super inefficiencies? Insights from a joint computation model for slacks-based measures in DEA," European Journal of Operational Research, Elsevier, vol. 226(2), pages 258-267.
    16. Sorin Gabriel Anton & Anca Elena Afloarei Nucu, 2020. "The Impact of Working Capital Management on Firm Profitability: Empirical Evidence from the Polish Listed Firms," JRFM, MDPI, vol. 14(1), pages 1-14, December.
    17. tone, Kaoru, 2010. "Variations on the theme of slacks-based measure of efficiency in DEA," European Journal of Operational Research, Elsevier, vol. 200(3), pages 901-907, February.
    18. Martin Bod’a & Martin Dlouhý & Emília Zimková, 2018. "Unobservable or omitted production variables in data envelopment analysis through unit-specific production trade-offs," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 26(4), pages 813-846, December.
    19. Diego Iribarren & Ian Vázquez-Rowe, 2013. "Is Labor a Suitable Input in LCA + DEA Studies? Insights on the Combined Use of Economic, Environmental and Social Parameters," Social Sciences, MDPI, vol. 2(3), pages 1-17, July.
    20. Sommersguter-Reichmann, Margit & Stepan, Adolf, 2015. "The interplay between regulation and efficiency: Evidence from the Austrian hospital inpatient sector," Socio-Economic Planning Sciences, Elsevier, vol. 52(C), pages 10-21.

    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:spr:snopef:v:4:y:2023:i:2:d:10.1007_s43069-023-00217-4. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.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.