Further Evidence on the Extent and Origins of Jit's Profitability Effects

Posted: 20 Feb 2002

See all articles by Michael Kinney

Michael Kinney

Texas A&M University - Department of Accounting

William F. Wempe

Texas Christian University - M.J. Neeley School of Business

Abstract

Empirical research provides scant evidence that just-in-time (JIT) adopters outperform their non-adopting industry peers. Using a sample of 201 JIT adopters and matched non-adopters, we examine the relation between financial performance and JIT. Our sample-wide results indicate that JIT adopters improve financial performance relative to non-adopters, and that profit margin, rather than asset turnover, is the primary source of such improvement. However, results of additional analyses suggest that JIT adopters below a firm-size threshold do not improve financial performance, a finding that reconciles our study to Balakrishnan et al. (1996), which examined a JIT adopter sample that included a greater proportion of small firms.

Keywords: Just-in-time; Inventory management; Production technology

JEL Classification: M11, M40, M46

Suggested Citation

Kinney, Michael R. and Wempe, William F., Further Evidence on the Extent and Origins of Jit's Profitability Effects. The Accounting Review, January 2002. Available at SSRN: https://ssrn.com/abstract=292941

Michael R. Kinney (Contact Author)

Texas A&M University - Department of Accounting ( email )

430 Wehner
College Station, TX 77843-4353
United States
979-862-2078 (Phone)
979-845-0028 (Fax)

William F. Wempe

Texas Christian University - M.J. Neeley School of Business ( email )

Fort Worth, TX 76129
United States
817-257-7614 (Phone)
817-257-7227 (Fax)

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