Stochastic frontier modelling of working capital efficiency across Europe
Journal article
Afrifa, A. G., Tingbani, I. and Adesina, O. O. 2022. Stochastic frontier modelling of working capital efficiency across Europe. Technological Forecasting and Social Change. 184, p. 122012. https://doi.org/10.1016/j.techfore.2022.122012
Authors | Afrifa, A. G., Tingbani, I. and Adesina, O. O. |
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Abstract | This paper adopts the stochastic frontier analysis (SFA) to model working capital efficiency (WCE) on a sample of 6,170 European firms from 2009 to 2018. We find: (i) larger firms are more efficient with their working capital management (WCM) than smaller firms, (ii) higher cash holding contributes to WCE, (iii) high competition is less conducive to WCE than low competition, (iv) export and sales growth potential decrease WCE and (v) WCE increases with access to bank credit. In the analysis, a distinction is made between the "old" EU countries and the "new" EU countries. The results are sensitive to the year of admission into the EU. The results are robust to omitted variable bias, using a more novel approach. |
Keywords | Working capital efficiency; Working capital management; Determinants of WCE; Inventory; Trade receivables; Trade payables; Stochastic frontier analysis |
Year | 2022 |
Journal | Technological Forecasting and Social Change |
Journal citation | 184, p. 122012 |
Publisher | Elsevier |
ISSN | 0040-1625 |
Digital Object Identifier (DOI) | https://doi.org/10.1016/j.techfore.2022.122012 |
Official URL | https://www.sciencedirect.com/science/article/pii/S0040162522005339 |
Publication dates | |
11 Sep 2022 | |
Publication process dates | |
Accepted | 29 Aug 2022 |
Deposited | 12 Sep 2022 |
Accepted author manuscript | License File Access Level Restricted |
Supplemental file | License |
Output status | Published |
https://repository.canterbury.ac.uk/item/92583/stochastic-frontier-modelling-of-working-capital-efficiency-across-europe
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