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Cited by 47Working Capital and Financial PerformanceSupply Chain and Inventory ManagementFinancial Analysis and Corporate Governance

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Effects of Working Capital Management on SME Profitability: Evidence from an Emerging Economy

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Sensini, Luca, Vazquez, Maria·2021·International Journal of Business and Management
DOI 10.5539/ijbm.v16n4p85
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Abstract

This paper's main objective was to evaluate the influence of working capital management policies on Argentine agro-industrial firms' profitability. To test our hypotheses, we analyzed a sample of 326 companies selected with a stratified random method based on an economic criterion. The data was collected through a structured questionnaire. From a methodological perspective, we used the individual determinants of working capital (DSO, DSI, DPO and CCC) as independent variables, while EBITDA represented the dependent variable. Additionally, we used leverage as a control variable. To assess the impact of individual determinants on corporate profitability, we used the dynamic panel data methodology. This approach has the advantage of controlling the unobservable effects that can influence profitability and endogeneity problems. We also checked the robustness of our results. The results offer several interesting insights. In particular, the results of the variables (DSI, DPO and CCC) showed a negative relationship with firms' profitability, suggesting that investing in inventory and requesting greater extensions from suppliers leads to additional costs that cannot offset the resulting benefits.

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Metadata

Authors
Sensini, L., & Vazquez, M.
Affiliations
University of Salerno (IT)
Corresponding author
Sensini, Luca
ORCID
Sensini, Luca
Venue
International Journal of Business and Management
Publisher
Canadian Center of Science and Education
Published
2021-03-14
Volume
16
Issue
4
Pages
85
ISSN
  • 1833-3850 (ISSN-L)
  • 1833-8119
DOI
10.5539/ijbm.v16n4p85
OpenAlex
W3138998010
Cited by
47
References
2
Citations by year
2026: 7 · 2025: 7 · 2024: 10 · 2023: 13 · 2022: 8 · 2021: 2
FWCI
12.36
Type
journal article
Language
en
Open access
Licence
Locations
  • International Journal of Business and Management (publishedVersion, cc-by)
  • RePEc: Research Papers in Economics (submittedVersion)
  • INFM-OAR (INFN Catania) (submittedVersion, cc-by)
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 › Business, Management and Accounting › Accounting › Financial Analysis and Corporate Governance
Keywords
working capital management, SME profitability, receivables turnover, inventory turnover, accounts payable turnover, cash conversion cycle, EBITDA, leverage, Argentine SMEs

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CoChat. (2026). Citation check: Effects of Working Capital Management on SME Profitability: Evidence from an Emerging Economy. https://app.cochat.ai/papers/10.5539/ijbm.v16n4p85
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Sensini, L., & Vazquez, M. (2021). Effects of Working Capital Management on SME Profitability: Evidence from an Emerging Economy. International Journal of Business and Management. https://doi.org/10.5539/ijbm.v16n4p85