Uncertainty in working capital management and firm performance: a COVID-19 perspective
This study examines the impact of the COVID-19 pandemic on firms' working capital management (WCM) and, eventually, firms’ performance of 4513 China and 1049 United Kingdom (UK) publicly listed firms. Static panel data analysis was used to achieve the objective of this study. By using the ca...
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| Format: | Article |
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Universiti Putra Malaysia
2022
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| _version_ | 1825938720409255936 |
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| author | Hossain, Mohammad Reyad Zariyawati, M. A. |
| author_facet | Hossain, Mohammad Reyad Zariyawati, M. A. |
| author_sort | Hossain, Mohammad Reyad |
| collection | UPM |
| description | This study examines the impact of the COVID-19 pandemic on firms' working capital
management (WCM) and, eventually, firms’ performance of 4513 China and 1049 United
Kingdom (UK) publicly listed firms. Static panel data analysis was used to achieve the
objective of this study. By using the cash conversion cycle (CCC) as a proxy for WCM,
we discover that COVID-19 has a negative effect on the WCM of Chinese firms. We also
found a statistically significant negative relationship between WCM and Chinese firms’
performance. This suggests that when firms are affected by COVID-19 uncertainty,
Chinese firms will be compelled to reduce their account receivables, inventory levels, and
seek increased credit terms from suppliers. Contrary to Chinese firms, we discover the
positive relationship between COVID-19 and WCM for UK firms. Further, the
relationship between WCM and UK firms’ performance is positively associated. The
greater investment in WCM by UK firms during the COVID-19 period generated a higher
firm performance. |
| first_indexed | 2024-04-09T03:50:38Z |
| format | Article |
| id | upm.eprints-102526 |
| institution | Universiti Putra Malaysia |
| last_indexed | 2024-04-09T03:50:38Z |
| publishDate | 2022 |
| publisher | Universiti Putra Malaysia |
| record_format | dspace |
| spelling | upm.eprints-1025262024-03-13T09:06:29Z http://psasir.upm.edu.my/id/eprint/102526/ Uncertainty in working capital management and firm performance: a COVID-19 perspective Hossain, Mohammad Reyad Zariyawati, M. A. This study examines the impact of the COVID-19 pandemic on firms' working capital management (WCM) and, eventually, firms’ performance of 4513 China and 1049 United Kingdom (UK) publicly listed firms. Static panel data analysis was used to achieve the objective of this study. By using the cash conversion cycle (CCC) as a proxy for WCM, we discover that COVID-19 has a negative effect on the WCM of Chinese firms. We also found a statistically significant negative relationship between WCM and Chinese firms’ performance. This suggests that when firms are affected by COVID-19 uncertainty, Chinese firms will be compelled to reduce their account receivables, inventory levels, and seek increased credit terms from suppliers. Contrary to Chinese firms, we discover the positive relationship between COVID-19 and WCM for UK firms. Further, the relationship between WCM and UK firms’ performance is positively associated. The greater investment in WCM by UK firms during the COVID-19 period generated a higher firm performance. Universiti Putra Malaysia 2022 Article PeerReviewed Hossain, Mohammad Reyad and Zariyawati, M. A. (2022) Uncertainty in working capital management and firm performance: a COVID-19 perspective. International Journal of Economics and Management, 16 (spec.1). 117 - 130. ISSN 1823-836X http://www.ijem.upm.edu.my/vol16noS1/8.%20Uncertainty%20in%20Working%20Capital.pdf 10.47836/ijeam.16.S1.008 |
| spellingShingle | Hossain, Mohammad Reyad Zariyawati, M. A. Uncertainty in working capital management and firm performance: a COVID-19 perspective |
| title | Uncertainty in working capital management and firm performance: a COVID-19 perspective |
| title_full | Uncertainty in working capital management and firm performance: a COVID-19 perspective |
| title_fullStr | Uncertainty in working capital management and firm performance: a COVID-19 perspective |
| title_full_unstemmed | Uncertainty in working capital management and firm performance: a COVID-19 perspective |
| title_short | Uncertainty in working capital management and firm performance: a COVID-19 perspective |
| title_sort | uncertainty in working capital management and firm performance a covid 19 perspective |
| work_keys_str_mv | AT hossainmohammadreyad uncertaintyinworkingcapitalmanagementandfirmperformanceacovid19perspective AT zariyawatima uncertaintyinworkingcapitalmanagementandfirmperformanceacovid19perspective |