Skip to main content
Fachgebiete
Automobil + Motoren Bauwesen + Immobilien Business IT + Informatik Elektrotechnik + Elektronik Energie + Nachhaltigkeit Finance + Banking Management + Führung Marketing + Vertrieb Maschinenbau + Werkstoffe Versicherung + Risiko
DE
EN
Bücher
Zeitschriften
Themenseiten
Organisationspsychologie Projektmanagement Marketing Smart Manufacturing
Weitere Formate
Podcasts Webinare Technik Webinare Wirtschaft Kongresse Veranstaltungskalender Awards
Jetzt Einzelzugang starten
Zugang für Unternehmen
Referenzkunden
SLX-Digitalkonferenz: Zukunftswerkstatt 2024

Mehr Umsatz mit Top-Kontakten

Am 7. Mai erfahren Sie, wie Vertriebsteams Leadgenerierung, Leadnurturing und Leadstrategien effizient steuern können.
Erweiterte Suche
Anmelden
nach oben
Small Business Economics
Erschienen in: Small Business Economics 2/2012

01.09.2012

How does working capital management affect the profitability of Spanish SMEs?

verfasst von: Sonia Baños-Caballero, Pedro J. García-Teruel, Pedro Martínez-Solano

Erschienen in: Small Business Economics | Ausgabe 2/2012

Einloggen

Aktivieren Sie unsere intelligente Suche, um passende Fachinhalte oder Patente zu finden.

search-config
loading …

Abstract

This paper analyzes the relation between working capital management and profitability for small and medium-sized enterprises (SMEs) by controlling for unobservable heterogeneity and possible endogeneity. Unlike previous studies, we examine a non-linear relation between these two variables. Our results show that there is a non-monotonic (concave) relationship between working capital level and firm profitability, which indicates that SMEs have an optimal working capital level that maximizes their profitability. In addition, a robustness check of our results confirms that firms’ profitability decreases as they move away from their optimal level.
Vorheriger Artikel Founders’ human capital and the performance of UK new technology based firms

Sie haben noch keine Lizenz? Dann Informieren Sie sich jetzt über unsere Produkte:

Springer Professional "Wirtschaft+Technik"

Online-Abonnement

Mit Springer Professional "Wirtschaft+Technik" erhalten Sie Zugriff auf:

  • über 102.000 Bücher
  • über 537 Zeitschriften

aus folgenden Fachgebieten:

  • Automobil + Motoren
  • Bauwesen + Immobilien
  • Business IT + Informatik
  • Elektrotechnik + Elektronik
  • Energie + Nachhaltigkeit
  • Finance + Banking
  • Management + Führung
  • Marketing + Vertrieb
  • Maschinenbau + Werkstoffe
  • Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

Jetzt informieren

Springer Professional "Wirtschaft"

Online-Abonnement

Mit Springer Professional "Wirtschaft" erhalten Sie Zugriff auf:

  • über 67.000 Bücher
  • über 340 Zeitschriften

aus folgenden Fachgebieten:

  • Bauwesen + Immobilien
  • Business IT + Informatik
  • Finance + Banking
  • Management + Führung
  • Marketing + Vertrieb
  • Versicherung + Risiko




Jetzt Wissensvorsprung sichern!

Jetzt informieren
Anhänge
Nur mit Berechtigung zugänglich
Fußnoten
1
European Payment Index is a report based on an annual written survey carried out by Intrum Justia in 25 European countries and involves several thousand companies.
 
2
This is a necessary condition to have a sufficient number of periods to be able to test for second-order serial correlation. A t-statistic on the difference of means indicates that this criterion for retaining data does not affect the mean values of the variables used in our study.
 
3
The inclusion in the model of the cost of financing as independent variable does not alter these results.
 
4
Like Deloof (2003), we find that Cash Conversion Cycle does not affect firms’ profitability when we estimate a linear relationship.
 
5
In particular, we divided our sample according to mean size and age. Then, we estimated the model for both firms above and below the mean values. We also estimated the model for firms above the 90th percentile in order to check whether we obtain similar results for larger and older firms. The results show that there is also a concave relationship for these sub-samples.
 
Literatur
Arellano, M., & Bond, S. (1991). Some test of specification for panel data: Monte Carlo evidence and an application to employment equations. Review of Economics Studies, 58, 277–297.CrossRef
Audretsch, D. B., & Elston, J. A. (1997). Financing the German mittelstand. Small Business Economics, 9, 97–110.CrossRef
Baños-Caballero, S., Garcia-Teruel, P. J., & Martínez-Solano, P. (2010). Working capital management in SMEs. Accounting and Finance, 50, 511–527.CrossRef
Benito, A. (2005). Financial pressure, monetary policy effects and inventories: Firm-level evidence from a market-based and a bank-based financial system. Economica, 72, 201–224.CrossRef
Benito, A., & Vlieghe, G. (2000). Stylised facts on UK corporate financial health, evidence from micro data. Bank of England Financial Stability Review, 1, 83–93.
Berger, A. N., & Udell, G. F. (1998). The economics of small business: The roles of private equity and debt markets in the financial growth cycle. Journal of Banking & Finance, 22, 613–673.CrossRef
Blinder, A. S., & Maccini, L. J. (1991). The resurgence of inventory research: What have we learned? Journal of Economic Survey, 5, 291–328.CrossRef
Brennan, M., Maksimovic, V., & Zechner, J. (1988). Vendor financing. Journal of Finance, 43, 1127–1141.
Conyon, M., & Murphy, K. (2000). The prince and the pauper? CEO pay in the United States and United Kingdom. The Economic Journal, 110, 640–671.CrossRef
Cuñat, V. (2007). Trade credit: Suppliers as debt collectors and insurance providers. Review of Financial Studies, 20, 491–527.CrossRef
Deloof, M. (2003). Does working capital management affect profitability of Belgian firms? Journal of Business, Finance and Accounting, 30, 573–587.CrossRef
Deloof, M., & Jegers, M. (1996). Trade credit, product quality, and intragroup trade: Some European evidence. Financial Management, 25, 33–43.CrossRef
Demirgurc-Kunt, A., & Maksimovic, V. (2002). Firms as financial intermediaries: Evidence from trade credit data. World Bank Policy Research Working Paper no. 2696. Washington D.C.: World Bank
Dyck, A., & Zingales, L. (2004). Private benefits of control: An international comparison. Journal of Finance, 59, 537–600.CrossRef
Emery, G. W. (1984a). A pure financial explanation for trade credit. Journal of Financial and Quantitative Analysis, 9, 271–285.CrossRef
Emery, G. W. (1984b). Measuring short-term liquidity. Journal of Cash Management, 4, 25–32.
Emery, G. W. (1987). An optimal financial response to variable demand. Journal of Financial and Quantitative Analysis, 22, 209–225.CrossRef
Fazzari, S. M., & Petersen, B. (1993). Working capital and fixed investment: New evidence on financing constraints. Rand Journal of Economics, 24, 328–342.CrossRef
Feeny, S., Harris, M. N., & Rogers, M. (2005). A dynamic panel analysis of the profitability of Australian tax entities. Empirical Economics, 30, 209–233.CrossRef
Ferris, J. S. (1981). A transactions theory of trade credit use. Quarterly Journal of Economics, 94, 243–270.CrossRef
Garcia-Teruel, P. J., & Martinez-Solano, P. (2007). Effects of working capital management on SME profitability. International Journal of Managerial Finance, 3, 164–177.CrossRef
Goddard, J., Tavakoli, M., & Wilson, J. (2005). Determinants of profitability in European manufacturing and services: Evidence from a dynamic panel model. Applied Financial Economics, 15, 1269–1282.CrossRef
Grablowsky, B. J. (1984). Financial management of inventory. Journal of Small Business Management, 22, 59–65.
Hsiao, C. (1985). Benefits and limitations of panel data. Econometrics Review, 4, 121–174.CrossRef
Jordan, J., Lowe, J., & Taylor, P. (1998). Strategy and financial policy in UK small firms. Journal of Business Finance and Accounting, 25, 1–27.CrossRef
Jose, M. L., Lancaster, C., & Stevens, J. L. (1996). Corporate return and cash conversion cycle. Journal of Economics and Finance, 20, 33–46.CrossRef
Kargar, J., & Blumenthal, R. A. (1994). Leverage impact on working capital in small business. TMA Journal, 14, 46–53.
Kim, Y. H., & Chung, K. H. (1990). An integrated evaluation of investment in inventory and credit: A cash flow approach. Journal of Business Finance and Accounting, 17, 381–390.
Lee, Y. W., & Stowe, J. D. (1993). Product risk, asymmetric information, and trade credit. Journal of Financial and Quantitative Analysis, 28, 285–300.CrossRef
Lewellen, W., McConnel, J., & Scott, J. (1980). Capital market influences on trade credit policies. Journal of Financial Research, 3, 105–113.
Long, M. S., Malitz, I. B., & Ravid, S. A. (1993). Trade credit, quality guarantees, and product marketability. Financial Management, 22, 117–127.CrossRef
Marotta, G. (2001). Is trade credit more expensive than bank loans? Evidence from Italian firm-level data. Working Paper.
Nadiri, M. I. (1969). The determinants of trade credit in the US total manufacturing sector. Econometrica, 37, 408–423.CrossRef
Ng, C. K., Smith, J. K., & Smith, R. L. (1999). Evidence on the determinants of credit terms used in interfirm trade. Journal of Finance, 54, 1109–1129.CrossRef
Ouyang, L. Y., Teng, J. T., Chuang, K. W., & Chuang, B. R. (2005). Optimal inventory policy with noninstantaneous receipt under trade credit. International Journal of Production Economics, 98, 290–300.CrossRef
Peel, M., & Wilson, N. (1996). Working capital and financial management practices in the small firm sector. International Small Business Journal, 14, 52–68.CrossRef
Peel, M. J., Wilson, N., & Howorth, C. (2000). Late payment and credit management in the small firm sector: Some empirical evidence. International Small Business Journal, 18, 17–37.CrossRef
Petersen, M., & Rajan, R. (1997). Trade credit: Theories and evidence. Review of Financial Studies, 10, 661–691.CrossRef
Sartoris, W., & Hill, N. (1983). Cash and working capital management. The Journal of Finance, 38, 349–360.CrossRef
Schiff, M., & Lieber, Z. (1974). A model for the integration of credit and inventory management. The Journal of Finance, 29, 133–140.
Schmidt, R., & Tyrell, M. (1997). Financial systems, corporate finance and corporate governance. European Financial Management, 3, 333–361.CrossRef
Scholtens, B. (1999). Analytical issues in external financing alternatives for SBEs. Small Business Economics, 12, 137–148.CrossRef
Shin, H. H., & Soenen, L. (1998). Efficiency of working capital and corporate profitability. Financial Practice and Education, 8, 37–45.
Shipley, D., & Davis, L. (1991). The role and burden-allocation of credit in distribution channels. Journal of Marketing Channels, 1, 3–22.CrossRef
Smith, K. (1980). Profitability versus liquidity tradeoffs in working capital management. In K. V. Smith (Ed.), Readings on the management of working capital (pp. 549–562). St Paul, MN: West Publishing Company.
Smith, J. K. (1987). Trade credit and informational asymmetry. Journal of Finance, 42, 863–872.
Soenen, L. (1993). Cash conversion cycle and corporate profitability. Journal of Cash Management, 13, 53–57.
Studenmund, A. H. (1997). Using econometrics: A practical guide. New York: Addison-Wesley.
Stulz, R. (1990). Managerial discretion and optimal financing policies. Journal of Financial Economics, 26, 3–27.CrossRef
Tong, Z. (2008). Deviations from optimal CEO ownership and firm value. Journal of Banking & Finance, 32, 2462–2470.CrossRef
Walker, D. (1989). Financing the small firm. Small Business Economics, 1, 285–296.CrossRef
Wang, Y. J. (2002). Liquidity management, operating performance, and corporate value: Evidence from Japan and Taiwan. Journal of Multinational Financial Management, 12, 159–169.CrossRef
Whited, T. M. (1992). Debt, liquidity constraints, and corporate investment: Evidence from panel data. Journal of Finance, 47, 1425–1460.
Wilner, B. S. (2000). The exploitation of relationship in financial distress: The case of trade credit. Journal of Finance, 55, 153–178.CrossRef
Metadaten
Titel
How does working capital management affect the profitability of Spanish SMEs?
verfasst von
Sonia Baños-Caballero
Pedro J. García-Teruel
Pedro Martínez-Solano
Publikationsdatum
01.09.2012
Verlag
Springer US
Erschienen in
Small Business Economics / Ausgabe 2/2012
Print ISSN: 0921-898X
Elektronische ISSN: 1573-0913
DOI
https://doi.org/10.1007/s11187-011-9317-8

Weitere Artikel der Ausgabe 2/2012

Small Business Economics 2/2012 Zur Ausgabe

OriginalPaper

Growth and entrepreneurship

OriginalPaper

Do firms learn by exporting or learn to export? Evidence from small and medium-sized enterprises

OriginalPaper

Bargaining power and information in SME lending

OriginalPaper

How SMEs exploit their intellectual property assets: evidence from survey data

OriginalPaper

Organisation structure and innovation performance in different environments

OriginalPaper

Entrepreneurship in India: the question of occupational transition