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Managing Optimal Working Capital and Corporate Performance: Evidence from Vietnam

Asian economic and financial review, 2019, Vol.9 (9), p.977-993

2019. Notwithstanding the ProQuest Terms and Conditions, you may use this content in accordance with the associated terms available at http://www.aessweb.com/journals/5002 ;ISSN: 2305-2147 ;EISSN: 2222-6737 ;DOI: 10.18488/journal.aefr.2019.99.977.993

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  • Title:
    Managing Optimal Working Capital and Corporate Performance: Evidence from Vietnam
  • Author: Van, Ha Thi Thuy ; Hung, Dang Ngoc ; Van, Vu Thi Thuy ; Xuan, Ngo Thanh
  • Subjects: Working capital
  • Is Part Of: Asian economic and financial review, 2019, Vol.9 (9), p.977-993
  • Description: This paper examined the impact of working capital management (WCM) on corporate performance (CP) in Vietnam. We considered whether there exists an optimal cash conversion cycle (CCC), an optimal net trade cycle (NTC) and how WCM affects CP. We also considered the effect of WCM on CP under financial constraints. This research uses the GLS regression method with research data from listed companies on Vietnam?s stock market from 2009 to 2018, with 5383 business observations in ten years. Initially, this study discovered that CCC and NTC were statistically significant and inversely related to corporate performance (measured by ROA and Tobin?s q). However, when continuing to use quadratic functions to analyze data, the study discovered that optimal CCC and NTC have not a linear but an inverted U shape instead. Research results have determined the level of optimal CCC, and NTC affecting CP (measured by ROA); though it was not meaningful when CP is measured by Tobin?s q. WCM was also considered in the case of companies with limited financial conditions.
  • Publisher: Karachi: Asian Economic and Social Society
  • Language: English
  • Identifier: ISSN: 2305-2147
    EISSN: 2222-6737
    DOI: 10.18488/journal.aefr.2019.99.977.993
  • Source: AUTh Library subscriptions: ProQuest Central
    ROAD
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