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Uncertainty in working capital management and firm performance: a COVID-19 perspective

This study examines the impact of the COVID-19 pandemic on firms' working capital management (WCM) and, eventually, firms’ performance of 4513 China and 1049 United Kingdom (UK) publicly listed firms. Static panel data analysis was used to achieve the objective of this study. By using the ca...

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Main Authors: Hossain, Mohammad Reyad, Zariyawati, M. A.
Format: Article
Published: Universiti Putra Malaysia 2022
Online Access:http://psasir.upm.edu.my/id/eprint/102526/
http://www.ijem.upm.edu.my/vol16noS1/8.%20Uncertainty%20in%20Working%20Capital.pdf
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spelling my.upm.eprints.1025262024-03-13T09:06:29Z http://psasir.upm.edu.my/id/eprint/102526/ Uncertainty in working capital management and firm performance: a COVID-19 perspective Hossain, Mohammad Reyad Zariyawati, M. A. This study examines the impact of the COVID-19 pandemic on firms' working capital management (WCM) and, eventually, firms’ performance of 4513 China and 1049 United Kingdom (UK) publicly listed firms. Static panel data analysis was used to achieve the objective of this study. By using the cash conversion cycle (CCC) as a proxy for WCM, we discover that COVID-19 has a negative effect on the WCM of Chinese firms. We also found a statistically significant negative relationship between WCM and Chinese firms’ performance. This suggests that when firms are affected by COVID-19 uncertainty, Chinese firms will be compelled to reduce their account receivables, inventory levels, and seek increased credit terms from suppliers. Contrary to Chinese firms, we discover the positive relationship between COVID-19 and WCM for UK firms. Further, the relationship between WCM and UK firms’ performance is positively associated. The greater investment in WCM by UK firms during the COVID-19 period generated a higher firm performance. Universiti Putra Malaysia 2022 Article PeerReviewed Hossain, Mohammad Reyad and Zariyawati, M. A. (2022) Uncertainty in working capital management and firm performance: a COVID-19 perspective. International Journal of Economics and Management, 16 (spec.1). 117 - 130. ISSN 1823-836X http://www.ijem.upm.edu.my/vol16noS1/8.%20Uncertainty%20in%20Working%20Capital.pdf 10.47836/ijeam.16.S1.008
institution Universiti Putra Malaysia
building UPM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Putra Malaysia
content_source UPM Institutional Repository
url_provider http://psasir.upm.edu.my/
description This study examines the impact of the COVID-19 pandemic on firms' working capital management (WCM) and, eventually, firms’ performance of 4513 China and 1049 United Kingdom (UK) publicly listed firms. Static panel data analysis was used to achieve the objective of this study. By using the cash conversion cycle (CCC) as a proxy for WCM, we discover that COVID-19 has a negative effect on the WCM of Chinese firms. We also found a statistically significant negative relationship between WCM and Chinese firms’ performance. This suggests that when firms are affected by COVID-19 uncertainty, Chinese firms will be compelled to reduce their account receivables, inventory levels, and seek increased credit terms from suppliers. Contrary to Chinese firms, we discover the positive relationship between COVID-19 and WCM for UK firms. Further, the relationship between WCM and UK firms’ performance is positively associated. The greater investment in WCM by UK firms during the COVID-19 period generated a higher firm performance.
format Article
author Hossain, Mohammad Reyad
Zariyawati, M. A.
spellingShingle Hossain, Mohammad Reyad
Zariyawati, M. A.
Uncertainty in working capital management and firm performance: a COVID-19 perspective
author_facet Hossain, Mohammad Reyad
Zariyawati, M. A.
author_sort Hossain, Mohammad Reyad
title Uncertainty in working capital management and firm performance: a COVID-19 perspective
title_short Uncertainty in working capital management and firm performance: a COVID-19 perspective
title_full Uncertainty in working capital management and firm performance: a COVID-19 perspective
title_fullStr Uncertainty in working capital management and firm performance: a COVID-19 perspective
title_full_unstemmed Uncertainty in working capital management and firm performance: a COVID-19 perspective
title_sort uncertainty in working capital management and firm performance: a covid-19 perspective
publisher Universiti Putra Malaysia
publishDate 2022
url http://psasir.upm.edu.my/id/eprint/102526/
http://www.ijem.upm.edu.my/vol16noS1/8.%20Uncertainty%20in%20Working%20Capital.pdf
_version_ 1794564340496465920
score 13.211869

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