Which Determinants Matter for Working Capital Management in Energy Industry? The Case of European Union Economy

Jaworski, Jacek; Czerwonka, Leszek

doi:10.3390/en15093030

Cited by 11 publications

(12 citation statements)

References 51 publications

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“…Consequently, SMEs must implement an active policy toward working capital. This result is consistent with Jaworski andCzerwonka (2022) andYousaf et al (2021), finding an inverse relationship between tangibility and CCC:…”

Section: Asset Tangibilitysupporting

confidence: 93%

“…Numerous research has investigated the correlation between profitability and working capital effectiveness. According to research (Jaworski and Czerwonka, 2022), organizations with greater profitability are likely to have more effective WCM. It is because prosperous firms have more financial freedom and can better manage their current assets and obligations, so enhancing their cash flow and thus decreasing their demand for working capital borrowing.…”

Section: Human Capitalmentioning

confidence: 99%

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Uncovering the hidden roots: the tapestry of working capital efficiency in Indian MSMEs

Tripathi

Chadha

Tripathi³

2023

JGOSS

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Purpose Working capital efficiency (WCE) is crucial for the sustainability of both large and small firms. This study aims to use the sample of micro, small and medium-sized enterprises (MSMEs) in India and tries to understand the critical determinants of WCE. Design/methodology/approach Using a fixed effect panel data model on a sample of 578 MSMEs (59 micro, 226 medium and 296 small firms), this study explores the relationship between the predictors of WCE. Additionally, the study adopted two metrics for measuring WCE among each type of firm (micro, small and medium). Findings Several firm-specific variables, including leverage (lever), firm age (AGE), firm size (Fsiz), profitability (Prof), extended payment terms (EPT), human capital (HCap), asset turnover ratio (ATR), reverse factoring (RF) and firm growth (FG), have a significant effect on working capital management efficiency (WCE). In contrast, tangibility (Tangib) and salary expenses (Sal) had an insignificant effect on working capital management efficiency. Research limitations/implications The study is based on secondary data. Future studies may incorporate some primary data, which will facilitate qualitative analysis. Originality/value The studies explore the relationship between WCE and expenses in HCap, EPT, RF and Sal as the predictors for WCE, which was not studied earlier in MSMEs scenario, especially in case of developing nation.

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Section: Asset Tangibilitysupporting

confidence: 93%

Section: Human Capitalmentioning

confidence: 99%

Uncovering the hidden roots: the tapestry of working capital efficiency in Indian MSMEs

Tripathi

Chadha

Tripathi³

2023

JGOSS

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“…Furthermore, previous studies did not cover such a long and recent temporal scope as in the proposed research [21,22]. This period is characterised by varying levels of economic variables, including the two years of the COVID-19 pandemic.…”

Section: Introductionmentioning

confidence: 98%

“…These relate to the scope of existing research, for example, research in relation to European emerging economies, such as Poland, where the impact of macroeconomic variables is poorly studied [21]. Moreover, previous studies have either concentrated on companies within a single industry [22] or only on listed companies [21]. Most notably, the list of macroeconomic variables analysed was limited to a few basic variables, such as GDP, inflation, unemployment, and interest rates [19,20,23].…”

Section: Introductionmentioning

confidence: 99%

Impact of Macroeconomic Factors on Financial Liquidity of Companies: A Moderation Analysis

Nowicki,

Ratajczak,

Szutowski

2024

Sustainability

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The objective of this study was to examine the potential moderating effects of the relationship between macroeconomic variables and the financial liquidity of enterprises. Given the significance of liquidity for companies and the profound impact of the macroeconomic environment, a research gap was identified in relation to the limited number of studies investigating the influence of macroeconomic factors on corporate liquidity. Additionally, the limited scope of companies surveyed in this area, in terms of sector, size, capital market presence, and the limited range of macroeconomic variables examined were notable. Most importantly, the absence of studies examining moderators of the relationship between macroeconomic factors and liquidity was a significant concern. To this end, two main research questions were formulated. First, what factors moderate the relationship between macroeconomic variables and the financial liquidity of companies? Second, what is the nature of the moderating effects on the relationship between macroeconomic variables and corporate financial liquidity? This research employed panel data analysis on an unbalanced panel comprising 5327 Polish enterprises spanning from 2003 to 2021. The primary analytical technique utilised was linear regression (pooled OLS) with robust standard errors clustered at the firm level. The main results of this study indicate that: (1) debt level, profitability, and the fixed assets to total assets ratio are significant moderators of some of the relationships between macroeconomic variables and corporate liquidity; (2) debt level moderates the relationship between the ratio of internal expenditures on research and development to GDP and financial liquidity, as well as the relationship between inflation rate and liquidity; the relationship is statistically significant and positive only for those enterprises with above-median debt levels; (3) profitability moderates the relationship between the employment coefficient and financial liquidity, as well as the relationship between the inflation rate and liquidity; in the high-profitability group, those relationships are positive, whereas in the low-profitability group, they are negative; (4) the ratio of fixed assets to total assets moderates the relationship between the money supply and corporate financial liquidity; for enterprises with low asset flexibility, there is a negative relationship between the money supply and financial liquidity; conversely, for enterprises with high asset flexibility, there is a positive relationship between the money supply and financial liquidity; (5) the rationale behind these findings can be derived from capital structure theory and financial analysis theory. The results of this study represent a step towards a more comprehensive understanding of the relationship between the macro environment and corporate liquidity, as well as the factors that moderate this relationship from both a microeconomic and a macroeconomic perspective. The findings of this study may also inform policy decisions governing the corporate sector due to a more nuanced understanding of the relationships between macroeconomic factors and corporate liquidity.

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“…To study the relationship between WCM and firm profitability, many researchers considered WC as a dependent variable (Jaworski & Czerwonka, 2022b;Sardo & Serrasqueiro, 2021;Sharma et al, 2020;Kinasih et al, 2019;Nyeadi et al, 2018;Singh & Kumar, 2017; S.M. Abbadi & R. Abbadi, 2013).…”

mentioning

confidence: 99%

Working capital management efficiency: a study of certified firms from the EFQM excellence model

Yousaf

2022

Financial Internet Quarterly

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Working capital management (WCM) plays an important role in a firm’s value, financial risk, and firm profitability. WCM requires continuous management to maintain a certain level of the numerous components of working capital (WC). The main aim of this study is to estimate the efficiency of WCM of certified firms from the European Foundation for Quality Management (EFQM) Excellence Model. The study also tests the speed to attain each firm’s target level of efficiency using industry norms as the target level of efficiency. The financial data of the Czech certified firms from the manufacturing sector was derived from the CRIBIS database from 2015 to 2020. The efficiency of WCM is measured by utilization index (UI), performance index (PI), and efficiency index (EI). The findings revealed that Gerresheimer Horsovsky Tyn Spol., Miele Technika, and Koyo Bearings Česká Republika efficiently managed WC, as their indexes are greater than 1. The number of efficient firms was the lowest in 2020 based on the year-wise comparison which means that the efficiency of WCM of the firms was severely affected by the coronavirus pandemic (COVID-19). All the β values are lower than one, which signifies that none of the selected firms outperform the manufacturing industry as a whole. The findings of the current research are useful to the management of the firms and recommends that they give importance to the different indexes of WCM and efficiently use the current assets to generate sales.

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Which Determinants Matter for Working Capital Management in Energy Industry? The Case of European Union Economy

Cited by 11 publications

References 51 publications

Uncovering the hidden roots: the tapestry of working capital efficiency in Indian MSMEs

Uncovering the hidden roots: the tapestry of working capital efficiency in Indian MSMEs

Impact of Macroeconomic Factors on Financial Liquidity of Companies: A Moderation Analysis

Working capital management efficiency: a study of certified firms from the EFQM excellence model

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