Remember Me
Or use your Academic/Social account:


Or use your Academic/Social account:


You have just completed your registration at OpenAire.

Before you can login to the site, you will need to activate your account. An e-mail will be sent to you with the proper instructions.


Please note that this site is currently undergoing Beta testing.
Any new content you create is not guaranteed to be present to the final version of the site upon release.

Thank you for your patience,
OpenAire Dev Team.

Close This Message


Verify Password:
Verify E-mail:
*All Fields Are Required.
Please Verify You Are Human:
fbtwitterlinkedinvimeoflicker grey 14rssslideshare1
Afrifa, G.A. (2016)
Publisher: Emerald
Languages: English
Types: Article
Subjects: H, H1, HF05001, HG
Purpose: - This paper aims to examine the influence of cash flow on the relationship between net working capital and firm performance. Design/methodology/approach - The paper uses unbalanced panel data regression analysis on a sample of 6,926 non-financial small and medium enterprises in the UK for the period from 2004 to 2013. Findings: - The results indicate a strong concave relationship between net working capital and performance in the absence of cash flow; however, the relationship becomes convex after taking cash flow into consideration. The results further show that firms with cash flow below the sample median exhibit lower investment in working capital, but firms with cash flow above the sample median have higher investment in working capital. The results suggest that managers should consider their firms cash flow when determining the appropriate investment to be made in working capital, so as to improve performance. Practical implications - Overall, the results suggest that whilst firms with limited cash flow should strive to reduce investment in working capital, firms with available cash flow should increase investment in working capital to improve performance. Originality/value - This current study incorporates the relevance of cash flow in assessing the association between working capital management and firm performance.
  • The results below are discovered through our pilot algorithms. Let us know how we are doing!

    • Afeef, M. (2011). “Analyzing the Impact of Working Capital Management on the Profitability of SME's in Pakistan”, International Journal of Business and Social Science, 2(22), 175 - 183.
    • Aktas, N., Croci, E. and Petmezas, D. (2014). “Is working capital management value-enhancing? Evidence from firm performance and investments”, Journal of Corporate Finance(0), Forthcoming. doi: http://dx.doi.org/10.1016/j.jcorpfin.2014.12.008 Autukaite, R. and Molay, E. (2011). “Cash holdings, working capital and firm value: Evidence from France. Paper presented at the International Conference of the French Finance Association (AFFI), May.
    • Baltagi, B. H. (2005). “ Econometric Analysis of Panel Data (3rd ed.). “ New York: John.
    • Baños-Caballero, S., García-Teruel, P. and Martínez-Solano, P. (2012). “How does working capital management affect the profitability of Spanish SMEs?”, Small Business Economics, 39(2), 517- 529.
    • Baños-Caballero, S., García-Teruel, P. J. and Martínez-Solano, P. (2010). “Working capital management in SMEs”, Accounting and Finance, 50(3), 511-527.
    • Baños-Caballero, S., García-Teruel, P. J. and Martínez-Solano, P. (2014). “Working capital management, corporate performance and financial constraints”, Journal of Business Research, 67(3), 332-338.
    • Belghitar, Y. and Khan, J. (2013). “Governance mechanisms, investment opportunity set and SMEs cash holdings”, Small Business Economics, 40(1), 59-72.
    • Blinder, A. S. and Maccini, L. J. (1991). “The Resurgence of Inventory Research: What Have We Learned? ”, Journal of Economic Surveys, 5(4), 291-328.
    • Brennan, M. J., Maksimovics, V. and Zechner, J. (1988). “Vendor Financing”, The Journal of Finance, 43(5), 1127-1141.
    • Chiou, J. R., Cheng, L. and Wu, H. W. (2006). “The determinants of working capital management”, Journal of American Academy of Business, 10, 149-155.
  • No related research data.
  • No similar publications.

Share - Bookmark

Cite this article