The Impact of Working Capital Management on Firms Profitability in Different Business Cycles: Evidence from Pakistan

Nida Shah ()

Journal of Finance and Economics Research, 2016, vol. 1, issue 1, 58-70

Abstract: This study investigates the influence of working capital management on firms' profitability under different business cycles in 65 non-financial firms listed on Karachi stock exchange of Pakistan by using the annual panel data for 10 years from the period of 2004 to 2013. We use Pedroni panel co-integration and Kao residual panel co-integration approaches to confirm the valid long run relationship between considered variables. The result of regression analysis indicates that the significant negative relationship exists between cash conversion cycle and its components with firms' profitability. Moreover, the business cycle affects the working capital management and firms' profitability relationship. It can be concluded that efficient working capital management matters and hence should be included in financial planning.

Keywords: Working capital management; profitability; business cycles; non-financial firms (search for similar items in EconPapers)
Date: 2016
References: Add references at CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://geistscience.com/JFER/issue1-16/Article5/JFER1601105.pdf (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:gei:jnlfer:v:1:y:2016:i:1:p:58-70

Access Statistics for this article

Journal of Finance and Economics Research is currently edited by Imtiaz ARIF and Syed Ali Raza

More articles in Journal of Finance and Economics Research from Geist Science, Iqra University, Faculty of Business Administration
Bibliographic data for series maintained by Imtiaz ARIF ().