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
Open accessAbstract
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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“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)
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“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)
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“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)
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Cites
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Testing Trade-Off and Pecking Order Predictions About Dividends and Debt
Fama, E. F., & French, K. R. (2002) · Review of Financial Studies · doi:10.1093/rfs/15.1.1 · Cited by 3,758
Regression standard errors in clustered samples
Rogers, W. H. (1993) · Stata technical bulletin · Cited by 2,694
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Private Benefits of Control: An International Comparison
Dyck, A., & Zingales, L. (2004) · The Journal of Finance · doi:10.1111/j.1540-6261.2004.00642.x · Cited by 2,512
Does Working Capital Management Affect Profitability of Belgian Firms?
Deloof, M. (2003) · Journal of Business Finance & Accounting · doi:10.1111/1468-5957.00008 · Cited by 1,849
Debt, Liquidity Constraints, and Corporate Investment: Evidence from Panel Data
Whited, T. M. (1992) · The Journal of Finance · doi:10.1111/j.1540-6261.1992.tb04664.x · Cited by 1,637
Testing Tradeoff and Pecking Order Predictions About Dividends and DebtPreprint
Fama, E. F., & French, K. R. (1999) · SSRN Electronic Journal · doi:10.2139/ssrn.199431 · Cited by 1,140
Effects of working capital management on SME profitability
Juan García‐Teruel, P., & Martínez‐Solano, P. (2007) · International Journal of Managerial Finance · doi:10.1108/17439130710738718 · Cited by 999
Working Capital and Fixed Investment: New Evidence on Financing Constraints
Fazzari, S. M., & Petersen, B. C. (1993) · The RAND Journal of Economics · doi:10.2307/2555961 · Cited by 907
Research works printed but not linked: 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.
Cited by
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Tian, M., Chen, Y., Tian, G., Huang, W., & Hu, C. (2023) · International Journal of Production Economics · doi:10.1016/j.ijpe.2023.108929 · Cited by 219
Wetzel, P., & Hofmann, E. (2019) · International Journal of Production Economics · doi:10.1016/j.ijpe.2019.07.001 · Cited by 142
Working capital management and profitability of listed manufacturing firms in Ghana
Amponsah-Kwatiah, K., & Asiamah, M. (2021) · International Journal of Productivity and Performance Management · doi:10.1108/ijppm-02-2020-0043 · Cited by 121
Akgün, A. İ., & Karataş, A. M. (2020) · International Journal of Managerial Finance · doi:10.1108/ijmf-08-2019-0294 · Cited by 122
How does working capital management affect the profitability of Indian companies?
Altaf, N., & Shah, F. A. (2018) · Journal of Advances in Management Research · doi:10.1108/jamr-06-2017-0076 · Cited by 102
Metadata
- Authors
- Lyngstadaas, H., & Berg, T.
- Affiliations
- BI Norwegian Business School (NO)
- Norwegian University of Science and Technology (NO)
- Venue
- International Journal of Managerial Finance
- Publisher
- Emerald
- Published
- 2016-06-06
- Volume
- 12
- Issue
- 3
- Pages
- 295-313
- ISSN
- 1743-9132 (ISSN-L)
- 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
- green
- hdl.handle.net
- 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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