Working Capital Management Practices of UK SMEs: The Role of Education and Experience

Abstract

This paper reports the results of an investigation into the effect of education and work experience possessed by managers on the working capital management practices of Small and Medium Enterprises (SMEs) listed on the Alternative Investment Market (AIM), from the perspective of financial directors. The analyses are based on questionnaire distributed to 248 AIM listed SMEs. The paper employs the T-test, one-way ANOVA and post hoc test on responses from 72 managers of AIM listed SMEs. The results show that managers with the highest qualification and many years of work experience have the ability to confidently manage all aspects of WCM, and therefore have the best WCM practices. Specifically, the results indicate that managers possessing professional qualification are more competent and therefore able to manage all WCM components. Also, managers with 21 years or over of work experience have the best WCM practices.

Keywords: Working Capital Management Practices, Small and Medium Enterprises, Alternative Investment

JEL Classification: G30, G31, G32, L26