Business, Management and Accounting
4 years ago

Effective working capital management boosts fixed investment despite financing constraints in China

Investment and financing constraints in China: does working capital management make a difference?
Sai Ding, Alessandra Guariglia, John Knight

Paper Summary

The study looked at Chinese companies from 2000-2007 to see how managing working capital affects investment and financing. Firms with good working capital management invest more in fixed assets even when facing financial constraints. This means that handling day-to-day finances well can help companies grow, even when money is tight.

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