Working capital management efficiency in large firms during crisis: implications for community-based enterprises

Prasenjit Roy, Matteo Rossi, Charbel Salloum, Hajer Jarrar and Biswajit Ghose
Additional contact information
Prasenjit Roy: Tezpur University
Matteo Rossi: University of Sannio [Benevento]
Charbel Salloum: Métis Lab EM Normandie - EM Normandie - École de Management de Normandie = EM Normandie Business School
Hajer Jarrar: CERIIM - Centre de Recherche en Intelligence et Innovation Managériales - Excelia Group | La Rochelle Business School
Biswajit Ghose: Tezpur University

Post-Print from HAL

Abstract: Purpose This study aims to examine the impact of the COVID-19 pandemic on the working capital management (WCM) efficiency of resilient and nonresilient firms listed on India's BSE 500 index. It focuses on key WCM components such as cash conversion cycles (CCC), accounts receivable periods, inventory conversion periods and accounts payable periods. Design/methodology/approach Panel data from 2012 to 2023 is analyzed using the System Generalized Method of Moments model. This study differentiates between resilient and nonresilient firms based on liquidity stress tests and cash flow performance before and during the pandemic. Findings Resilient firms demonstrated superior WCM efficiency, maintaining shorter CCCs, effective receivables and inventory management and stable payables. Nonresilient firms faced significant inefficiencies, including extended CCCs and slower receivables and inventory turnover, exposing gaps in their WCM practices. Research limitations/implications This study is limited to the pandemic period. Future research could explore broader timeframes to understand the long-term effects on WCM. Practical implications Managers should enhance WCM strategies, focusing on cash flow optimization to strengthen firm resilience during crises. Social implications Efficient WCM supports job retention, preserves supplier relationships and stabilizes local economies, contributing to broader community resilience during crises. Originality/value This study extends the resource-based view by emphasizing WCM as a critical internal resource that supports firm resilience during economic crises. It contributes new insights into how Indian firms adapted their WCM strategies in response to COVID-19.

Keywords: Working capital management; Community-based entrepreneurship; Resilience; Crisis management (search for similar items in EconPapers)
Date: 2025-02-06
References: Add references at CitEc
Citations:

Published in Journal of Enterprising Communities: People and Places in the Global Economy, 2025, ⟨10.1108/JEC-10-2024-0201⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:hal:journl:hal-04992166

DOI: 10.1108/JEC-10-2024-0201

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().