paper research on working capital management 2015

• DOI: 10.1108/QRFM-04-2013-0010
• Corpus ID: 153713912

Working capital management: a literature review and research agenda

• H. Singh , Satish Kumar
• Published 29 August 2014
• Business, Economics
• Qualitative Research in Financial Markets

97 Citations

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Qualitative Research in Financial Markets

ISSN : 1755-4179

Article publication date: 29 July 2014

The purpose of this paper is to review research on working capital management (WCM) and to identify gaps in the current body of knowledge, which justify future research directions. WCM has attracted serious research attention in the recent past, especially after the financial crisis of 2008.

Design/methodology/approach

Using systematic literature review (SLR) method, the present study reviews 126 articles from referred journal and international conferences published on WCM.

Detailed content analysis reveals that most of the research work is empirical and focuses mainly on two aspects, impact of working capital on profitability of firm and working capital practices. Major research work has concluded that WCM is essential for corporate profitability. The major issues with prior literature are lack of survey-based approach and lack of systematic theory development study, which opens all new areas for future research. The future research directions proposed in this paper may help develop a greater understanding of determinants and practices of WCM.

Practical implications

Till date, literature on classification of WCM has been almost non-existent. This paper reviews a large number of articles on WCM and provides a classification scheme in to various categories. Subsequently, various emerging trends in the field of WCM are identified to help researchers specifying gaps in the literature and direct research efforts.

Originality/value

This paper contains a comprehensive listing of publications on the WCM and their classification according to various attributes. The paper will be useful to researchers, finance professionals and others concerned with WCM to understand the importance of WCM. To the best of the authors’ knowledge, no detailed SLR on this topic has previously been published in academic journals.

• Literature review
• Survey methods
• Operating cycle
• Working capital management

Pratap Singh, H. and Kumar, S. (2014), "Working capital management: a literature review and research agenda", Qualitative Research in Financial Markets , Vol. 6 No. 2, pp. 173-197. https://doi.org/10.1108/QRFM-04-2013-0010

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Working capital management and firm profitability

• Short survey paper
• Published: 09 May 2013
• Volume 24 , pages 77–87, ( 2013 )

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• Thorsten Knauer 1 &
• Arnt Wöhrmann 1  

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Managing a firm’s current assets and liabilities (working capital management) is highly relevant to the success of that firm. While the short-term liquidity effects of working capital management are straightforward to derive, it is an empirical question how it affects firm profitability. This short survey paper consolidates the empirical literature on the association between working capital management and firm profitability. This state of the art analysis provides evidence of positive effects of accounts receivable management and inventory management on profitability. However, results for the effects of accounts payable management on profitability are driven by reverse causality. Finally, this paper highlights critical aspects of prior research and points to avenues for future research.

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Knauer, T., Wöhrmann, A. Working capital management and firm profitability. J Manag Control 24 , 77–87 (2013). https://doi.org/10.1007/s00187-013-0173-3

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Published : 09 May 2013

Issue Date : May 2013

DOI : https://doi.org/10.1007/s00187-013-0173-3

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