We examine the value effect of working capital management (WCM) for a large sample of US firms between 1982–2011. Our results indicate (i) the existence of an optimal level of working capital policy; and (ii) firms that converge to that optimal level (either by increasing or decreasing their investment in working capital) improve their stock and operating performance. We also document that corporate investment is the channel through which efficient WCM translates into superior firm performance. In particular, efficient WCM allows firms to redeploy underutilized corporate resources to higher-valued use, such as the funding of cash acquisitions.

Aktas, N., Croci, E., Petmezas, D., Is working capital management value-enhancing? Evidence from firm performance and investments, <<JOURNAL OF CORPORATE FINANCE>>, 2015; 30 (Febbraio): 98-113. [doi:10.1016/j.jcorpfin.2014.12.008] [http://hdl.handle.net/10807/64718]

Is working capital management value-enhancing? Evidence from firm performance and investments

Croci, Ettore;
2015

Abstract

We examine the value effect of working capital management (WCM) for a large sample of US firms between 1982–2011. Our results indicate (i) the existence of an optimal level of working capital policy; and (ii) firms that converge to that optimal level (either by increasing or decreasing their investment in working capital) improve their stock and operating performance. We also document that corporate investment is the channel through which efficient WCM translates into superior firm performance. In particular, efficient WCM allows firms to redeploy underutilized corporate resources to higher-valued use, such as the funding of cash acquisitions.
2015
Inglese
198474
Versione precedente gia' disponibile su Publicatt
Aktas, N., Croci, E., Petmezas, D., Is working capital management value-enhancing? Evidence from firm performance and investments, <<JOURNAL OF CORPORATE FINANCE>>, 2015; 30 (Febbraio): 98-113. [doi:10.1016/j.jcorpfin.2014.12.008] [http://hdl.handle.net/10807/64718]
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10807/64718
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