Determinants of Working Capital in Emerging Markets: Do Economic Developments Matter?


Cetenak E. H. , VURAL G. , Sokmen A. G.

GLOBAL BUSINESS STRATEGIES IN CRISIS: STRATEGIC THINKING AND DEVELOPMENT, ss.385-397, 2017 (SSCI İndekslerine Giren Dergi) identifier

  • Cilt numarası:
  • Basım Tarihi: 2017
  • Doi Numarası: 10.1007/978-3-319-44591-5_26
  • Dergi Adı: GLOBAL BUSINESS STRATEGIES IN CRISIS: STRATEGIC THINKING AND DEVELOPMENT
  • Sayfa Sayısı: ss.385-397

Özet

Previous literature established on the effects of working capital management on firm's profitability or firm value and focused mostly on firm-level determinants of working capital. In this study, we aimed to examine the determinants of working capital management not only at firm level but also industry-country level. Our sample consists of 1253 manufacturing firms across 13 industries from 14 emerging markets between year 2000 and 2014. Our findings indicate that at firm-level variables, return on asset has a negative relationship with working capital while Tobin Q and Altman Z-score have a positive. At industry-country level variables, HH index, exchange rate, Lerner index, and rule of law have a positive relationship with working capital levels while credit from private sector variable has a negative relationship with working capital levels.