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Effects of working capital management on firm performance and firm value – A study of the fisheries industry in Vietnam

Author

Listed:
  • Vo Thi Quy

    (International University –Vietnam National University HCMC, Vietnam)

  • Le Thi Minh Nguyen

    (Van Hien University, Vietnam)

Abstract

This research investigates the effects of working capital management through cash conversion cycle and its components (average receivable days - ARD, average inventory days – AID, and average payable days - APD), along with the effects of the working capital management policies on firm performance and firm value in the fisheries industry. Generalized Method of Moment (GMM) was applied with the data collected from 21 fisheries companies listed on Vietnam's stock market in the period 2008 -2012. The research found that the cash conversion cycle, average receivable days, average inventory days, and average payable days have a negative impact on firm performance (ROA) and firm value (Tobin'Q). The research results also showed that aggressive working capital policy has a negative impact, but the conservative working capital policy has a positive impact on firm performance and firm value of fisheries selected companies.

Suggested Citation

  • Vo Thi Quy & Le Thi Minh Nguyen, 2017. "Effects of working capital management on firm performance and firm value – A study of the fisheries industry in Vietnam," HO CHI MINH CITY OPEN UNIVERSITY JOURNAL OF SCIENCE - ECONOMICS AND BUSINESS ADMINISTRATION, HO CHI MINH CITY OPEN UNIVERSITY JOURNAL OF SCIENCE, HO CHI MINH CITY OPEN UNIVERSITY, vol. 7(2), pages 42-52.
    • Handle: RePEc:bjw:econen:v:7:y:2017:i:2:p:42-52
    DOI: 10.46223/HCMCOUJS.econ.en.7.2.184.2017
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    References listed on IDEAS

    as
    1. Chisti Khalid Ashraf, 2012. "The Relationship between Working Capital Efficiency and Profitability," Advances In Management, Advances in Management, vol. 5(12), December.
    2. Chisti Khalid ASHRAF, 2012. "The relationship between working capital efficiency and profitability," The Journal of Accounting and Management, Danubius University of Galati, issue 3, pages 21-45, December.
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