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Inventory management, cost of capital and firm performance: evidence from manufacturing firms in Jordan

Investment management & financial innovations, 2017, Vol.14 (3), p.4-14 [Peer Reviewed Journal]

2017. This work is published under http://creativecommons.org/licenses/by-nc/4.0/ (the “License”). Notwithstanding the ProQuest Terms and Conditions, you may use this content in accordance with the terms of the License. ;ISSN: 1810-4967 ;EISSN: 1812-9358 ;DOI: 10.21511/imfi.14(3).2017.01

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  • Title:
    Inventory management, cost of capital and firm performance: evidence from manufacturing firms in Jordan
  • Author: Alrjoub, Ashraf Mohammad Salem ; Ahmad, Muhannad Akram
  • Subjects: Accounting - Business Administration ; Business Economy / Management ; cost of capital ; Economic models ; Economy ; Financial Markets ; finished goods ; firm value ; Generalized method of moments ; Inventory ; Inventory control ; Inventory management ; Micro-Economics ; raw materials ; work-in-process
  • Is Part Of: Investment management & financial innovations, 2017, Vol.14 (3), p.4-14
  • Description: Several studies have examined the relationship between inventory management and firm performance. However, most of these studies ignore the impact of inventory types on the relationship. Moreover, the relationship is influenced by some factors such as cost of capital which has not been considered. This study examines the moderating effect of cost of capital on the relationship between inventory types and firm performance. The data of 48 firms for the period 2010-2016 which formed 279 firm-year observations were used in this study. With the use of Pearson correlation and panel Generalized Method of Moments (GMM) estimation, the findings show that inventory management with consideration of its types influence firm performance in the long term. In addition, it is also found that cost of capital moderates the relationship between inventory management and firm performance. However, the interaction between cost of capital and inventory types has different implications. It is suggested that firms should consider cost of capital when making decision on inventory types and align their inventory control to fit in to the changes in their business environment.
  • Publisher: Sumy: ТОВ “Консалтингово-видавнича компанія “Ділові перспективи”
  • Language: English
  • Identifier: ISSN: 1810-4967
    EISSN: 1812-9358
    DOI: 10.21511/imfi.14(3).2017.01
  • Source: CEEOL: Open Access
    ProQuest Central
    DOAJ Directory of Open Access Journals

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