Performance Effects of Working Capital in Emerging Markets

Turki Alshammari
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Turki Alshammari: Deptartment of Finance, College of Business Administration, Kuwait University, Kuwait.

International Journal of Economics and Financial Issues, 2018, vol. 8, issue 5, 80-87

Abstract: This paper strives to provide evidence of the effect of working capital policies on corporate profitability in a new and different setting, the Gulf Cooperation Council (GCC) countries. As the corporate private sector receives lavish subsidies from local oil-rich governments, both the theoretical propositions and the worldwide accepted evidence are glitched. Employing a set of pooled regression models, this paper documents a trivial, if any, association between the efficiency of working capital management and the corporate profitability for a set of nonfinancial firms in all the GCC countries. The results are robust to the econometric model, the profitability measure, and the country.

Keywords: Working Capital; Tobin's Q; Debt ratio; Profitability; Cash Conversion Cycle; GCC countries; Firm Value (search for similar items in EconPapers)
JEL-codes: G3 G31 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (3)

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