Is working capital management value-enhancing? Evidence from firm performance and investments

Ettore Croci, Nihat Aktas, Dimitris Petmezas

Risultato della ricerca: Contributo in rivistaArticolo in rivistapeer review

123 Citazioni (Scopus)

Abstract

We examine the value effect of working capital management (WCM) for a large sample of US firms between 1982–2011. Our results indicate (i) the existence of an optimal level of working capital policy; and (ii) firms that converge to that optimal level (either by increasing or decreasing their investment in working capital) improve their stock and operating performance. We also document that corporate investment is the channel through which efficient WCM translates into superior firm performance. In particular, efficient WCM allows firms to redeploy underutilized corporate resources to higher-valued use, such as the funding of cash acquisitions.
Lingua originaleEnglish
pagine (da-a)98-113
Numero di pagine16
RivistaJournal of Corporate Finance
Volume30
DOI
Stato di pubblicazionePubblicato - 2015

Keywords

  • Working capital management

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