Litigation risk and working capital

Malm, James; Sah, Nilesh B.

doi:10.1108/mf-03-2018-0129

Cited by 22 publications

(12 citation statements)

References 39 publications

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“…The current study takes CCC as an explained variable for measuring the WCM efficiency of listed manufacturing firms indulged in exporting activities. CCC represents the time lag between working capital payment and cash collection from selling finished products or services (Malm and Sah, 2019). The formula for CCC is taken from Goel and Sharma (2015) and is calculated as follows:where…”

Section: Methodsmentioning

confidence: 99%

Assessing working capital management efficiency of Indian manufacturing exporters

Seth

Chadha

Ruparel

et al. 2020

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PurposeThe purpose of this paper is to empirically investigate the relationship between working capital management (WCM) efficiency and exogenous variables of the Indian manufacturing sector along with its sub-industries that are involved in export activities.Design/methodology/approachPanel regression (fixed effects) was used on a sample of 563 Indian manufacturing firms involved in export activities, covering a time period from 2008 to 2018.FindingsIndustry-wise results showed a significant relation of leverage, net fixed asset ratio, profitability, asset turnover ratio, total asset growth rate and productivity with cash conversion cycle (CCC).Research limitations/implicationsFirstly, having taken a sample from a developing economy, the results of our study may be generalizable only among developing contexts. Secondly, the time period taken in this study (2008–2018) has witnessed several economic fluctuations such as recession and demonetization which might differ for the firms or countries in normal conditions.Practical implicationsAn improved working capital model could advance the firms' performance by reducing the CCC of the firm, thereby creating efficiency in WCM. In addition, the results of this study could be helpful for many stakeholders such as working capital managers, debt holders, investors, financial consultants and others for monitoring the firms.Originality/valueThis study contributes to the existing literature in the relation between WCM efficiency and exogenous variables of the Indian manufacturing firms engaged in the export activities. Moreover, this study is one of the few research studies to investigate this relationship among Indian export firms in different industries, thus filling the gap in similar work done in other countries.

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Section: Methodsmentioning

confidence: 99%

Assessing working capital management efficiency of Indian manufacturing exporters

Seth

Chadha

Ruparel

et al. 2020

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“…As highlighted above, there is now a large body of research stemming from La Porta et al (1998) on examining how the legal and regulatory environment impact firms and markets. In the first special topic paper, Malm and Sah (2019) add to the legal and litigation literature, by exploring litigation risk and working capital management. Using a hand-collected data set of corporate lawsuits against S&P 1,500 companies, they show that higher litigation risk firms have longer cash conversion cycles.…”

Section: Interdisciplinary Research In Finance Special Topic Overviewmentioning

confidence: 99%

Interdisciplinary finance

Anderson

Chang

2019

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“…Management motivation to apply accounting conservatism will be stronger, if the risk of litigation threat to the company is relatively high [30], [36]. Management views that litigation risk is a risk that has the potential to cause quite material costs because it will later be related to legal regulations [32], [33], [37].…”

Section: Introductionmentioning

confidence: 99%

The Effect of Managerial Ownership, Covenant Debt and Litigation Risk on Accounting Conservatism

Abbas¹,

Ismail²,

Taqi³

et al. 2022

Proceedings of the Third International Conference Administration Science, ICAS 2021, September 15 2021, Bandung, Indonesia

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We looked at the impact of managerial ownership, debt covenants, and litigation risk on accounting conservatism. This study's population includes 12 consumer products manufacturing companies registered on the Indonesia Stock Exchange in 2015-2018. Purposive sampling was employed to choose the study's sample companies. The data is secondary. Panel data regression analysis was used to analyze the data. Accounting conservatism is positively influenced by managerial ownership and lawsuit risk. Accounting conservatism is not affected by differing loan covenants. The results of this study show that management's financial reporting conservatism is unaffected by debt arrangements. In any case, the debt agreement should encourage management to enhance its financial reporting. If not, the agreement sanctions the management. Of course, this finding should help economic knowledge, particularly in accounting and finance.

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Litigation risk and working capital

Cited by 22 publications

References 39 publications

Assessing working capital management efficiency of Indian manufacturing exporters

Assessing working capital management efficiency of Indian manufacturing exporters

Interdisciplinary finance

The Effect of Managerial Ownership, Covenant Debt and Litigation Risk on Accounting Conservatism

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