IDEAS home Printed from https://ideas.repec.org/a/ids/gbusec/v25y2021i3-4p400-423.html
   My bibliography  Save this article

A meta-analysis of the role of working capital management on firm profitability

Author

Listed:
  • Shakila Yasmin
  • Md. Mohiuddin

Abstract

Working capital management (WCM) is an important function that influences firm performance. Researchers have widely investigated the role of WCM on firm profitability and found diverse results in different contexts. In order to make an overarching conclusion about the role of WCM on firm profitability, this research conducts quantitative meta-analysis of 46 research articles on this topic. One hundred ninety eight regression models and 248 correlation measures have been aggregated by adopting Hunter et al.'s (1982) three-step methodology. Results indicate that profitability is negatively influenced by efficiency and aggressiveness of strategies in relation to WCM. However, liquidity shows positive impact on profitability. Significant moderating and/or control variables include firm size, growth, age, asset intangibility, leverage, firm risk and overall economic growth. Practitioners may use the aggregate model developed by this study in determining the optimum level WCM efficiency, strategies, and liquidity for given states of the moderating and/or control variables.

Suggested Citation

  • Shakila Yasmin & Md. Mohiuddin, 2021. "A meta-analysis of the role of working capital management on firm profitability," Global Business and Economics Review, Inderscience Enterprises Ltd, vol. 25(3/4), pages 400-423.
    • Handle: RePEc:ids:gbusec:v:25:y:2021:i:3/4:p:400-423
    as

    Download full text from publisher

    File URL: http://www.inderscience.com/link.php?id=118727
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ids:gbusec:v:25:y:2021:i:3/4:p:400-423. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sarah Parker (email available below). General contact details of provider: http://www.inderscience.com/browse/index.php?journalID=168 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.