Effect of Working Capital Management on Firm Performance: The Role of Ownership Structure

Shams ur Rahman, Khurshed Iqbal and Aamir Nadeem
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Shams ur Rahman: Assistant Professor,
Khurshed Iqbal: Assistant Professor,
Aamir Nadeem: Assistant Professor,

Global Social Sciences Review, 2019, vol. 4, issue 1, 108-119

Abstract: Current study investigates the effect of working capital management on firm performance with the moderating role of ownership structure. A random sample of 77 firms for the period 2011-2015 was selected. By using fixed effect model the study demonstrated statistically significant negative relationship of leverage, average collection period and quick ratio on firm performance, while current ratio, account payable and inventory turnover found with positive significant effect on Firm Performance. Further, the effect of working capital on firm performance was positively affected by Institutional ownership and negatively affected by Managerial ownership. Thus, the results suggest that the owner/manager needs to manage their limited resources efficiently for the improvement of profitability. It is also advised that investor and shareholder pay attention to the level of institutional and managerial ownership at the time of investment..

Keywords: Working Capital Management; Firm Performance; Ownership Structure (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:gss:journl:v:4:y:2019:i:1:p:108-119

DOI: 10.31703/gssr.2019(IV-I).10

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