Transformations in
Business & Economics
- © Vilnius University, 2002-2022
- © Brno University of Technology, 2002-2022
- © University of Latvia, 2002-2022
Article
A CROSS-COUNTRY STUDY ON THE DETERMINANTS OF WORKING CAPITAL MANAGEMENT: GMM APPROACH
Anwar Hussain, Simona Andreea Apostu , Ploypailin Kijkasiwat, Laszlo Vasa
ABSTRACT: The paper analyzed the determinants of Working Capital Management (WCM) of listed manufacturing firms across South Asian Association of Regional Corporation (SAARC) countries from 2000 to 2020. Employing a Generalized Method of Moments, we found that operational risk and market risk are key hurdles to efficient working capital management. Our results are providing an important managerial implication for the use of operational risk and market risk in selected countries. Firms in selected countries can manage an optimal level of WCM through controlling operational risk and market risk, therefore should develop a ranking system about WCM activities to boost up their firm value.
KEYWORDS:  working capital management, operational risk, market risk, Generalized Method of Moments, SAARC Countries.
JEL classification: C23, J24