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Working capital management and performance of listed SMEs

Working capital management and performance of listed SMEs
Working capital management and performance of listed SMEs
This paper reports the results of the effect of working capital management (WCM) on the performance of listed small and medium enterprises (SMEs). The study also examines whether the effect of WCM on performance differs between ‘small’ and ‘medium’ firms. The paper employs panel data regression analysis on a sample of 141 Alternative Investment Market listed SMEs for an eight-year period (2007–2014). The results show that for all SMEs, WCM components (inventory holding period, accounts receivable period, and accounts payable period) have concave relationships with performance. However, when the SMEs are split into ‘small’ and ‘medium’ firms, the results suggest that WCM is relatively more important to the performance of ‘small’ firms than ‘medium’ firms. Overall, the results imply that WCM components affect performance of the listed SMEs. The findings have important implication for policy-makers who prescribe financial assistance mechanisms for SMEs.
0827-6331
557-578
Afrifa, Godfred
14c18fea-d94d-48e4-871f-ee87417d1984
Tauringana, Venancio
27634458-b041-4bc1-94da-3e031d777e4f
Tingbani, Ishmael
45a374ab-5b8f-49f6-856c-21b8ad8451ac
Afrifa, Godfred
14c18fea-d94d-48e4-871f-ee87417d1984
Tauringana, Venancio
27634458-b041-4bc1-94da-3e031d777e4f
Tingbani, Ishmael
45a374ab-5b8f-49f6-856c-21b8ad8451ac

Afrifa, Godfred, Tauringana, Venancio and Tingbani, Ishmael (2016) Working capital management and performance of listed SMEs. Journal of Small Business & Entrepreneurship, 27 (6), 557-578. (doi:10.1080/08276331.2015.1114351).

Record type: Article

Abstract

This paper reports the results of the effect of working capital management (WCM) on the performance of listed small and medium enterprises (SMEs). The study also examines whether the effect of WCM on performance differs between ‘small’ and ‘medium’ firms. The paper employs panel data regression analysis on a sample of 141 Alternative Investment Market listed SMEs for an eight-year period (2007–2014). The results show that for all SMEs, WCM components (inventory holding period, accounts receivable period, and accounts payable period) have concave relationships with performance. However, when the SMEs are split into ‘small’ and ‘medium’ firms, the results suggest that WCM is relatively more important to the performance of ‘small’ firms than ‘medium’ firms. Overall, the results imply that WCM components affect performance of the listed SMEs. The findings have important implication for policy-makers who prescribe financial assistance mechanisms for SMEs.

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More information

Accepted/In Press date: 13 October 2015
e-pub ahead of print date: 22 December 2015
Published date: 1 January 2016
Organisations: Centre of Excellence for International Banking, Finance & Accounting

Identifiers

Local EPrints ID: 405331
URI: http://eprints.soton.ac.uk/id/eprint/405331
ISSN: 0827-6331
PURE UUID: 96d2a4ef-2baa-49f6-a0f0-ae2490ac9ee3
ORCID for Venancio Tauringana: ORCID iD orcid.org/0000-0002-1433-324X

Catalogue record

Date deposited: 02 Feb 2017 16:39
Last modified: 05 Nov 2019 01:44

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Contributors

Author: Godfred Afrifa
Author: Ishmael Tingbani

University divisions

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