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

The DOI matches its Crossref record; 35 of the 35 references it cites were found in a registry or an index.

Working capital management: evidence from Norway

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Lyngstadaas, Hakim, Berg, Terje·2016·International Journal of Managerial Finance
DOI 10.1108/ijmf-01-2016-0012
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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.

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Research works printed but not linked: 1

  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 No. 8, pp. 83-93.

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Metadata

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 › Decision Sciences › Management Science and Operations Research › Supply Chain and Inventory Management
  • Social Sciences › Economics, Econometrics and Finance › Finance › Corporate Finance and Governance
Keywords
working capital management, cash conversion cycle, profitability, small and medium-sized enterprises, Norwegian companies, return on assets, endogeneity

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