Working capital management and performance of listed SMEs

Afrifa, G., Tauringana, V. and Tingbani, I. (2015) Working capital management and performance of listed SMEs. Journal of Small Business & Entrepreneurship .

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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.

Item Type: Article
Uncontrolled Keywords: SMEs; small firms; medium firms; WCM; performance; AIM
Subjects: H Social Sciences > HF Commerce > HF5001 Business
Divisions: Faculty of Social and Applied Sciences > The Business School
Depositing User: Dr Godfred Afrifa
Date Deposited: 28 Nov 2017 14:08
Last Modified: 28 Nov 2017 14:08
URI: https://create.canterbury.ac.uk/id/eprint/16542

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Last edited: 29/06/2016 12:23:00