Impact of inventory leanness on financial performance of firms with mediating effect of risk-taking

Farah Naz, Amna Bashir, Veera Salman and Anam Tariq

International Journal of Procurement Management, 2025, vol. 24, issue 1, 76-91

Abstract: This study investigates the impact of inventory leanness on the firms' financial performance along with the mediating role of the risk-taking decision of those firms. This study analysed 244 Pakistani firms from 2010-2020 using panel regression analysis. The statistical findings show that having optimised levels of inventory boosts the financial performance of firms. Moreover, the risk-taking decision of firms partially mediates this impact. Previous contradictory findings and fewer studies examining Pakistani firms in this regard mandate this study to be carried out. The study is limited by a few factors such as a specific country under study leading to a lack of generalisability. Additionally, the impact of inventory leanness on financial performance can be hindered due to uncontrollable or systematic risk factors, making room for future research.

Keywords: inventory leanness; financial performance; financial leverage; capital intensity; size of firm; return on assets; ROA; return on investment; ROI; empirical leanness indicator; ELI; inventory turnover. (search for similar items in EconPapers)
Date: 2025
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