Effects of working capital management policies on shareholders’ value: Evidence from listed manufacturing firms in Ghana
This study has sought to determine the effects of working capital management policies on shareholder value creation for six manufacturing firms listed at the Ghana Stock Exchange for the period of 2000-2013. Data were gathered from the annual reports of the firms and the publication of Ghana Stock E...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Economists' Association of Vojvodina
2019-01-01
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| Series: | Panoeconomicus |
| Subjects: | |
| Online Access: | http://www.doiserbia.nb.rs/img/doi/1452-595X/2019/1452-595X1800027A.pdf |
| _version_ | 1818486587118321664 |
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| author | Adam Anokye M. Quansah Edward |
| author_facet | Adam Anokye M. Quansah Edward |
| author_sort | Adam Anokye M. |
| collection | DOAJ |
| description | This study has sought to determine the effects of working capital management policies on shareholder value creation for six manufacturing firms listed at the Ghana Stock Exchange for the period of 2000-2013. Data were gathered from the annual reports of the firms and the publication of Ghana Stock Exchange. The study employed a longitudinal explanatory non-experimental research design applied to a dynamic panel Autoregressive Distributed Lags methodology framework for analysing the data. The results indicated that conservative current asset investment policies increase economic value added (EVA), whereas aggressive current asset investment policies enhance market-to-book ratio and Tobin’s Q in the long-run. On the other hand, conservative current asset financing policies enhance market-to-book ratio, Tobin’s Q, and EVA in the longrun. Thus, investors discount aggressive current assets’ financing policies. A firm pursuing an aggressive current asset investment policy should balance it with a conservative current asset financing policy to create value for its shareholders. |
| first_indexed | 2024-12-10T16:24:59Z |
| format | Article |
| id | doaj.art-846a42dff0f34137ae6975d7a0fe7381 |
| institution | Directory Open Access Journal |
| issn | 1452-595X 2217-2386 |
| language | English |
| last_indexed | 2024-12-10T16:24:59Z |
| publishDate | 2019-01-01 |
| publisher | Economists' Association of Vojvodina |
| record_format | Article |
| series | Panoeconomicus |
| spelling | doaj.art-846a42dff0f34137ae6975d7a0fe73812022-12-22T01:41:41ZengEconomists' Association of VojvodinaPanoeconomicus1452-595X2217-23862019-01-0166565968610.2298/PAN161206027A1452-595X1800027AEffects of working capital management policies on shareholders’ value: Evidence from listed manufacturing firms in GhanaAdam Anokye M.0Quansah Edward1University of Cape Cast, School of Business, Department of Finance, Cape CoastUniversity of Cape Cast, School of Business, Department of Finance, Cape CoastThis study has sought to determine the effects of working capital management policies on shareholder value creation for six manufacturing firms listed at the Ghana Stock Exchange for the period of 2000-2013. Data were gathered from the annual reports of the firms and the publication of Ghana Stock Exchange. The study employed a longitudinal explanatory non-experimental research design applied to a dynamic panel Autoregressive Distributed Lags methodology framework for analysing the data. The results indicated that conservative current asset investment policies increase economic value added (EVA), whereas aggressive current asset investment policies enhance market-to-book ratio and Tobin’s Q in the long-run. On the other hand, conservative current asset financing policies enhance market-to-book ratio, Tobin’s Q, and EVA in the longrun. Thus, investors discount aggressive current assets’ financing policies. A firm pursuing an aggressive current asset investment policy should balance it with a conservative current asset financing policy to create value for its shareholders.http://www.doiserbia.nb.rs/img/doi/1452-595X/2019/1452-595X1800027A.pdfcurrent asset investment policycurrent asset financing policypanel unit rootpanel ardlshareholder value |
| spellingShingle | Adam Anokye M. Quansah Edward Effects of working capital management policies on shareholders’ value: Evidence from listed manufacturing firms in Ghana Panoeconomicus current asset investment policy current asset financing policy panel unit root panel ardl shareholder value |
| title | Effects of working capital management policies on shareholders’ value: Evidence from listed manufacturing firms in Ghana |
| title_full | Effects of working capital management policies on shareholders’ value: Evidence from listed manufacturing firms in Ghana |
| title_fullStr | Effects of working capital management policies on shareholders’ value: Evidence from listed manufacturing firms in Ghana |
| title_full_unstemmed | Effects of working capital management policies on shareholders’ value: Evidence from listed manufacturing firms in Ghana |
| title_short | Effects of working capital management policies on shareholders’ value: Evidence from listed manufacturing firms in Ghana |
| title_sort | effects of working capital management policies on shareholders value evidence from listed manufacturing firms in ghana |
| topic | current asset investment policy current asset financing policy panel unit root panel ardl shareholder value |
| url | http://www.doiserbia.nb.rs/img/doi/1452-595X/2019/1452-595X1800027A.pdf |
| work_keys_str_mv | AT adamanokyem effectsofworkingcapitalmanagementpoliciesonshareholdersvalueevidencefromlistedmanufacturingfirmsinghana AT quansahedward effectsofworkingcapitalmanagementpoliciesonshareholdersvalueevidencefromlistedmanufacturingfirmsinghana |