Does working capital management influence firm competitiveness?

Kód výsledku v IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F62690094%3A18450%2F24%3A50021779" target="_blank" >RIV/62690094:18450/24:50021779 - isvavai.cz</a>

Výsledek na webu

<a href="https://systems.enpress-publisher.com/index.php/jipd/article/view/5482" target="_blank" >https://systems.enpress-publisher.com/index.php/jipd/article/view/5482</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.24294/jipd.v8i8.5482" target="_blank" >10.24294/jipd.v8i8.5482</a>

Jazyk výsledku

angličtina

Název v původním jazyce

Does working capital management influence firm competitiveness?

Popis výsledku v původním jazyce

Working Capital Management (hereafter WCM) is the strategic tool that helps a company navigate through challenging economic growth, and influence its competitive performance. Thus, this study examines the impact of WCM on the competitiveness of firms operating in the non-financial sectors in Pakistan. We use the Generalized Method of Moments (GMM) technique to ensure the robustness of our results. The study findings reveal that both a large net trade cycle and surplus working capital have a substantial negative impact on firms’ competitiveness within their respective industries. These results suggest that companies should streamline their investments in working capital accounts and concentrate more resources on long-term projects that maximize value to improve their competitiveness compared to other companies. Therefore, firms that are effectively managing their short-term financial affairs are experiencing much better performance in all aspects of firm performance. The research findings highlight the urgent need for governmental initiatives designed to improve WCM practices in these industries. It is imperative for the management of companies with excess net working capital to maximize their working capital efficiency, aligning it with industry standards to enhance competitiveness. Moreover, policymakers should prioritize easing access to financial alternatives that allow enterprises to maintain an efficient working capital structure without relying on excessive measures. Furthermore, policymakers should be cautious when determining minimum cash balance requirements in a cash-strapped economy where external financing is relatively more expensive than in other regional economies. © 2024 by author(s).

Název v anglickém jazyce

Does working capital management influence firm competitiveness?

Popis výsledku anglicky

Working Capital Management (hereafter WCM) is the strategic tool that helps a company navigate through challenging economic growth, and influence its competitive performance. Thus, this study examines the impact of WCM on the competitiveness of firms operating in the non-financial sectors in Pakistan. We use the Generalized Method of Moments (GMM) technique to ensure the robustness of our results. The study findings reveal that both a large net trade cycle and surplus working capital have a substantial negative impact on firms’ competitiveness within their respective industries. These results suggest that companies should streamline their investments in working capital accounts and concentrate more resources on long-term projects that maximize value to improve their competitiveness compared to other companies. Therefore, firms that are effectively managing their short-term financial affairs are experiencing much better performance in all aspects of firm performance. The research findings highlight the urgent need for governmental initiatives designed to improve WCM practices in these industries. It is imperative for the management of companies with excess net working capital to maximize their working capital efficiency, aligning it with industry standards to enhance competitiveness. Moreover, policymakers should prioritize easing access to financial alternatives that allow enterprises to maintain an efficient working capital structure without relying on excessive measures. Furthermore, policymakers should be cautious when determining minimum cash balance requirements in a cash-strapped economy where external financing is relatively more expensive than in other regional economies. © 2024 by author(s).

Druh

J_SC - Článek v periodiku v databázi SCOPUS

CEP obor

—

OECD FORD obor

50204 - Business and management

Projekt

—

Návaznosti

S - Specificky vyzkum na vysokych skolach

Rok uplatnění

2024

Kód důvěrnosti údajů

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Název periodika

Journal of Infrastructure, Policy and Development

ISSN

2572-7923

e-ISSN

2572-7931

Svazek periodika

8

Číslo periodika v rámci svazku

8

Stát vydavatele periodika

US - Spojené státy americké

Počet stran výsledku

19

Strana od-do

"Article number: 5482"

Kód UT WoS článku

—

EID výsledku v databázi Scopus

2-s2.0-85205124348