Working capital management and performance of listed SMEs

Journal article


Afrifa, G., Tauringana, V. and Tingbani, I. 2015. Working capital management and performance of listed SMEs. Journal of Small Business & Entrepreneurship . https://doi.org/10.1080/08276331.2015.1114351
AuthorsAfrifa, G., Tauringana, V. and Tingbani, I.
Abstract

This paper reports the results of the effect of working capital management (WCM) on the performance of listed small and medium enterprises (SMEs). The study also examines whether the effect of WCM on performance differs between ‘small’ and ‘medium’ firms.
The paper employs panel data regression analysis on a sample of 141 Alternative Investment Market listed SMEs for an eight-year period (2007–2014).

The results show that for all SMEs, WCM components (inventory holding period, accounts receivable period, and accounts payable period) have concave relationships with performance. However, when the SMEs are split into ‘small’ and ‘medium’ firms, the results suggest that WCM is relatively more important to the performance of ‘small’ firms than ‘medium’ firms. Overall, the results imply that WCM components affect performance of the listed SMEs.

The findings have important implication for policy-makers who prescribe financial assistance mechanisms for SMEs.

KeywordsSMEs; small firms; medium firms; WCM; performance; AIM
Year2015
JournalJournal of Small Business & Entrepreneurship 
PublisherTaylor & Francis
Digital Object Identifier (DOI)https://doi.org/10.1080/08276331.2015.1114351
Publication dates
Online22 Dec 2015
Publication process dates
Deposited28 Nov 2017
Accepted13 Oct 2015
Output statusPublished
Permalink -

https://repository.canterbury.ac.uk/item/8868y/working-capital-management-and-performance-of-listed-smes

  • 95
    total views
  • 0
    total downloads
  • 0
    views this month
  • 0
    downloads this month

Export as

Related outputs

Managing group work: the impact of peer assessment on student engagement
Adesina, S., Adesina, Olufunbi Alaba, Adelopo, Ismail and Afrifa, Godfred Adjappong 2022. Managing group work: the impact of peer assessment on student engagement. Accounting Education. 32 (1), pp. 90-113. https://doi.org/10.1080/09639284.2022.2034023
The impact of international diversification on credit scores: Evidence from the UK
Halabi, H., Alshehabi, A., Wood, G., Khan, Z. and Afrifa, G. 2021. The impact of international diversification on credit scores: Evidence from the UK. International Business Review. 30 (6), p. 101856. https://doi.org/10.1016/j.ibusrev.2021.101856
Abnormal inventory and performance in manufacturing companies – evidence from trade credit channels
Afrifa, G., Alshehabi, A., Tingbani, I. and Halabi, H. 2020. Abnormal inventory and performance in manufacturing companies – evidence from trade credit channels. Review of Quantitative Finance and Accounting . https://doi.org/10.1007/s11156-020-00903-y
Working capital management, cash flow and SMEs’ performance
Afrifa, G. and Tingbani, I. 2018. Working capital management, cash flow and SMEs’ performance. International Journal of Banking, Accounting and Finance. 9 (1). https://doi.org/10.1504/IJBAAF.2018.10010466
A quantitative model for environmentally sustainable supply chain performance measurement
Acquaye, A., Ibn-Mohammed, T., Genovese, A., Afrifa, G., Yamoah, F. and Oppon, E. 2017. A quantitative model for environmentally sustainable supply chain performance measurement. European Journal of Operational Research. https://doi.org/10.1016/j.ejor.2017.10.057
How does Directors remuneration affect SMEs’ performance?
Afrifa, G. and Adesina, S. 2018. How does Directors remuneration affect SMEs’ performance? Review of Accounting and Finance. 17 (2), pp. 238-258. https://doi.org/10.1108/RAF-12-2016-0199
How does directors' remuneration affect SMEs’ performance?
Adesina, S. and Afrifa, G. 2017. How does directors' remuneration affect SMEs’ performance?
Net working capital, cash flow and performance of UK SMEs
Afrifa, G. 2016. Net working capital, cash flow and performance of UK SMEs. Review of Accounting and Finance. 15 (1), pp. 21-44. https://doi.org/10.1108/RAF-02-2015-0031
Net trade credit: what are the determinants?
Afrifa, G. and Gyapong, E. 2017. Net trade credit: what are the determinants? International Journal of Managerial Finance. https://doi.org/10.1108/IJMF-12-2015-0222
Corporate governance and performance of UK listed small and medium enterprises
Afrifa, G. and Tauringana, V. 2015. Corporate governance and performance of UK listed small and medium enterprises. Corporate Governance. 15 (5). https://doi.org/10.1108/CG-03-2015-0029
Working capital level influence on SME profitability
Afrifa, G. and Padachi, K. 2016. Working capital level influence on SME profitability. Journal of Small Business and Enterprise Development. 23 (1), pp. 44-63. https://doi.org/10.1108/JSBED-01-2014-0014
Working capital management practices and profitability of AIM listed SMEs
Afrifa, G. 2015. Working capital management practices and profitability of AIM listed SMEs. Journal of Enterprising Culture. 23 (1), pp. 1-23. https://doi.org/10.1142/S0218495815500016
Working capital management practices of UK SMEs: the role of education and experience
Afrifa, G. 2013. Working capital management practices of UK SMEs: the role of education and experience. International Journal of Academic Research in Accounting, Finance and Management Sciences. 3 (4), pp. 185-196.
WCM component importance ranking order by SMEs: financial directors perspective
Afrifa, G. 2014. WCM component importance ranking order by SMEs: financial directors perspective. International Journal of Current Research. 6 (1), pp. 631-4639.
The relative importance of working capital management and its components to SMEs profitability
Tauringana, V. and Afrifa, G. 2013. The relative importance of working capital management and its components to SMEs profitability. Journal of Small Business and Enterprise Development. 20 (3). https://doi.org/10.1108/JSBED-12-2011-0029