Working capital, COVID-19 and firm performance: empirical evidence from India

Prasenjit Roy

Global Business and Economics Review, 2025, vol. 33, issue 1, 108-132

Abstract: This study investigates the impact of COVID-19 on working capital and financial performance of Indian firms within the BSE 500 index spanning from 2014-2022. Using a panel regression model, the research analyses various working capital policy dimensions and their links to key performance indicators, such as ROA and TBQ during the pandemic. The findings provide essential insights for policymakers and managers navigating the complexities of the global financial landscape. The study advocates for adaptive working capital management (WCM) policies, emphasising the need for a balanced working capital strategy and caution in short-term debt reliance during pandemics. The positive relationship between the cash conversion cycle and performance indicators challenges conventional wisdom, prompting a revaluation of traditional practices considering dynamic economic conditions. The findings serve as a blueprint, promoting strategic foresight, adaptive policies, and resilient financial management amid the evolving economic landscape.

Keywords: COVID-19; working capital management; WCM; financial performance; BSE 500 Index; panel regression; economic conditions. (search for similar items in EconPapers)
Date: 2025
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