Empirical study on the leadership structure and working capital — based on the moderating effect of internal control

Huang Changxiang (), Sunita Lylia Binti Hamdan () and Noridayu Binti Abdullah Sani ()

Asian Economic and Financial Review, 2025, vol. 15, issue 5, 710-727

Abstract: The purpose of this study is to examine the relationship between CEO-chairman separation, internal control, and working capital. To achieve this research objective, the study employs the least squares method, using a sample of 22,719 observations from A-share listed companies on the Shanghai and Shenzhen Stock Exchanges from 2007 to 2019. The main hypotheses are tested through the coefficients of a multiple linear regression equation. The results of this study indicate that the implementation of role separation between the CEO and Chairman can effectively reduce the cash cycle and improve the efficiency of working capital management. Furthermore, good internal controls not only help to improve the effectiveness of managing working capital, they also help to moderate the connection between role separation and the effectiveness of managing working capital. Furthermore, compared with state-owned enterprises, private enterprises demonstrate a more significant impact of internal control effectiveness on improving working capital management efficiency. This further highlights the critical role of internal control in the working capital management of private enterprises.

Keywords: Cash cycle; Internal control; Leadership structure; Principal-agent theory; Property right nature; Working capital. (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://archive.aessweb.com/index.php/5002/article/view/5388/8253 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:asi:aeafrj:v:15:y:2025:i:5:p:710-727:id:5388

Access Statistics for this article

More articles in Asian Economic and Financial Review from Asian Economic and Social Society
Bibliographic data for series maintained by Robert Allen ().