Working Capital Management: An Exploratory Study

Journal of Applied Finance, Spring/Summer 2012, Volume 22, Issue 1, pp. 161-174

Posted: 29 Jul 2012

See all articles by Hernan Etiennot

Hernan Etiennot

IAE Business School

Lorenzo A. Preve

IAE Business School, Universidad Austral

Virginia Sarria-Allende

IAE Business School - Universidad Austral

Multiple version iconThere are 2 versions of this paper

Date Written: 2012

Abstract

Working capital management is an issue in which finance research is scarce. One possible reason behind this fact might relate to the relative ease with which efficient financial markets correct deviations from optimal working capital policies. However, in less efficient financial markets, pervasive among emerging economies, working capital management is critical for both firms’ performance and survival. The difference in the market’s ability for providing immediate assistance to firms might explain the differential consequences on firms’ profitability and financial distress. This article explains the fundamentals of working capital management, the importance of its interaction with financial markets, and how this interaction might explain working capital patterns around the world.

Keywords: Working Capital Management, emerging economies,financial markets

Suggested Citation

Etiennot, Hernan and Preve, Lorenzo A. and Sarria-Allende, Virginia, Working Capital Management: An Exploratory Study (2012). Journal of Applied Finance, Spring/Summer 2012, Volume 22, Issue 1, pp. 161-174. Available at SSRN: https://ssrn.com/abstract=2119217

Hernan Etiennot (Contact Author)

IAE Business School ( email )

Buenos Aires
Argentina

Lorenzo A. Preve

IAE Business School, Universidad Austral ( email )

Mariano Acosta s/n y Ruta 8
CCN°49
Pilar, Buenos Aires 1629
Argentina
+54(2322) 48-1055 (Phone)

HOME PAGE: http://www.iae.edu.ar/LPreve

Virginia Sarria-Allende

IAE Business School - Universidad Austral ( email )

Buenos Aires
Argentina

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