Business, Management and Accounting
8 years ago

Active working capital management boosts firm investment despite financing constraints.

Asian Journal of Research in Business Economics and Management
Does Working Capital Management Make a Difference
Fatemeh Baghiyan, Hossein Etemadi

Paper Summary

The article shows that managing working capital can help companies deal with financial constraints and invest in fixed assets. The researchers looked at data from over 800 companies between 2005 and 2011 to see how cash flow, working capital, and fixed assets are related to investment. They found that actively managing working capital can reduce the impact of financial constraints on fixed investments.

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