Working Capital Management: An Exploratory Study

14 Pages Posted: 17 Nov 2015

See all articles by Hernan Etiennot

Hernan Etiennot

IAE Business School

Lorenzo A. Preve

IAE Business School, Universidad Austral

Virginia Sarria-Allende

IAE Business School - Universidad Austral

Multiple version iconThere are 2 versions of this paper

Date Written: November 13, 2015

Abstract

Working capital management is an issue in which finance research is scarce. One possible reason behind this fact might relate to the relative ease with which efficient financial markets correct deviations from optimal working capital policies. However, in less efficient financial markets, pervasive among emerging economies, working capital management is critical for both firms’ performance and survival. The difference in the market’s ability for providing immediate assistance to firms might explain the differential consequences on firms’ profitability and financial distress. This article explains the fundamentals of working capital management, the importance of its interaction with financial markets, and how this interaction might explain working capital patterns around the world.

Suggested Citation

Etiennot, Hernan and Preve, Lorenzo A. and Sarria-Allende, Virginia, Working Capital Management: An Exploratory Study (November 13, 2015). Journal of Applied Finance (Formerly Financial Practice and Education), Vol. 22, No. 1, 2012, Available at SSRN: https://ssrn.com/abstract=2690290

Hernan Etiennot (Contact Author)

IAE Business School ( email )

Buenos Aires
Argentina

Lorenzo A. Preve

IAE Business School, Universidad Austral ( email )

Mariano Acosta s/n y Ruta 8
CCN°49
Pilar, Buenos Aires 1629
Argentina
+54(2322) 48-1055 (Phone)

HOME PAGE: http://www.iae.edu.ar/LPreve

Virginia Sarria-Allende

IAE Business School - Universidad Austral ( email )

Buenos Aires
Argentina

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
1,023
Abstract Views
3,162
Rank
40,744
PlumX Metrics