CoChat
Sign Up
Cited by 139Working Capital and Financial PerformanceSupply Chain and Inventory ManagementCorporate Finance and Governance

Working capital management: Evidence from Norway

Open access
Lyngstadaas, Hakim, Berg, Terje·2016·International Journal of Managerial Finance
DOI 10.1108/ijmf-01-2016-0012
Open this paper in CoChat — free accountOpen PDF

Abstract

Purpose: – The purpose of this paper is to provide empirical evidence of whether working capital management (WCM) has an effect on the profitability of small- and medium-sized Norwegian firms. Design/methodology/approach: – The data comprise 21,075 Norwegian small- and medium-sized enterprises and 84,300 observations made between 2010 and 2013. Panel data regressions were applied with fixed effects and a two-stage least squares analysis was employed to control for endogeneity. Findings: – The results indicate that reducing cash conversion cycle will increase profitability. Even though endogeneity may exist, this does not affect the results from the previous analysis. Similar results are also obtained when industry-specific effects are controlled for, supporting the robustness of the results. The relevance of quadratic dependencies of the profitability on independent variables was also identified and suggests a decreasing trend of return on assets with increasing values of the WCM’s characteristic variables. Research limitations/implications: – Drawing on similar studies, this study confirms that WCM is relevant for firms’ profitability. Practical implications: – The practice of aggressive working capital policy in Norwegian firms is confirmed by the results of this study. Originality/value: – This study contributes to the current research on the relationship between WCM and profitability by using a large dataset to add further robustness to results, and thus verifying whether or not the results in previous studies may be confirmed or not. Moreover, this is the first published study about this relationship among Norwegian firms in different industries, thus filling a gap in similar research conducted in other European countries.

The claims and statistics of this paper haven’t been checked yet.

Run the check — free, no account needed. It reads the open-access text and checks the sources it cites.

A few free checks a day · papers already verified open instantly · results are public

Integrity signals

Registry

Crossref · 10.1108/ijmf-01-2016-0012

Cites

35 of 35 references verified0 citation errors · 0 not checkable

Statistics

Claims the paper makes

The claims and statistics of this paper haven’t been checked yet.

Run the check — free, no account needed. It reads the open-access text and checks the sources it cites.

A few free checks a day · papers already verified open instantly · results are public

Claims other papers make about this one

Each is checked against this paper’s own text: does it say what the citing paper says it does?

  • Quicker payables turnover days are beneficial for firms operating in industries where supplier relationships are vital to ensure the supply chain's stability.

    “quicker payables turnover days are beneficial for firms operating in industries where supplier relationships are vital to ensure the supply chain's stability”

    From Working capital management, COVID-19, and profitability of UK retail firms (2025) · cites this paper as Lyngstadaas and Berg (2016)

    Section 2.1 (page unavailable) says paying suppliers earlier can lower the cost of goods, and Section 3.4 reports an association between fewer accounts-payable days and higher profitability. The paper does not establish that this benefit is specific to industries where supplier relationships are vital to supply-chain stability. (LLM, conf=0.86)

    Experimental — accuracy not yet measured

  • The results of this study, when considering all four variables combined, are consistent with Lyngstadaas and Berg (2016) and Nguyen et al. (2020).

    “When considering all four variables combined, the results in this study are consistent with Lyngstadaas and Berg (2016) and Nguyen et al. (2020).”

    From Working Capital Management Impact on Profitability: Pre-Pandemic and Pandemic Evidence from the European Automotive Industry (2022) · cites this paper as Lyngstadaas and Berg (2016)

  • Lyngstadaas and Berg (2016) and Nguyen et al. (2020) found that all components of working capital have a negative impact on profitability represented by ROA.

    “They found that all components of the working capital have a negative impact on profitability represented by ROA.”

    From Working Capital Management Impact on Profitability: Pre-Pandemic and Pandemic Evidence from the European Automotive Industry (2022) · cites this paper as Lyngstadaas and Berg (2016)

Self-check

Percentages, sums and reported differences re-computed from the paper’s own numbers.

The self-check needs the paper’s full text.

Cites

Flagged first, then by citations

Research works printed but not linked: 2

  1. Benito, A. and Vlieghe, G. (2000), «Stylised facts on UK corporate financial health, evidence from micro data», Bank of England Financial Stability Review, Vol. 1, pp. 83-93.
  2. Kieschnick, R., LaPlante, M., Moussawi, R. and Baranchuk, N. (2006), «Corporate Working Capital Management: Determinants and Consequences», Working Paper, University of Texas, pp. 1-33.

Cited by

Sorted by citations

Related

Authors
Lyngstadaas, H., & Berg, T.
Affiliations
  • BI Norwegian Business School (NO)
  • Norwegian University of Science and Technology (NO)
ORCID
Venue
International Journal of Managerial Finance
Publisher
Emerald
Published
2016-06-06
Volume
12
Issue
3
Pages
295-313
ISSN
1743-9132 (ISSN-L)
DOI
10.1108/ijmf-01-2016-0012
OpenAlex
W2413742852
Cited by
139
References
35
Citations by year
2026: 3 · 2025: 13 · 2024: 17 · 2023: 19 · 2022: 15 · 2021: 20 · 2020: 17 · 2019: 18 · 2018: 9 · 2017: 7 · 2016: 1
FWCI
42.67
Type
journal article
Language
en
Open access
Licence
Locations
  • International Journal of Managerial Finance (publishedVersion)
  • BIBSYS Brage (BIBSYS (Norway)) (acceptedVersion, other-oa)
  • NORA - Norwegian Open Research Archives (submittedVersion, other-oa)
Topics
  • Social Sciences › Business, Management and Accounting › Accounting › Working Capital and Financial Performance
  • Social Sciences › Business, Management and Accounting › Management Information Systems › Supply Chain and Inventory Management
  • Social Sciences › Business, Management and Accounting › Accounting › Corporate Finance and Governance
Keywords
working capital management, cash conversion cycle, profitability, small and medium-sized enterprises, Norwegian companies, return on assets, endogeneity

About these checks

Registry, retraction, Cites and statistics results are computed, not judged, with one exception: a printed reference that no index lists is read once by a model before it counts as a citation error. Claims are extracted by a model and kept only when their quote appears verbatim in the text; each cited source is then checked, with a model’s help, for whether it says what the claim relies on. Those verdicts can be wrong — read the claim’s quote and the cited source before relying on one.

Statistics and arithmetic are recomputed, not judged.

Confidence bands are shown only for fields calibrated on our annotated test set. None is calibrated yet, so no band is shown.

What counts as a claim ›How we measure confidence ›How we check this ›

Are you an author, or do you see a problem with this page? Request a review