Faculty of Economic Science and Management, Management Department, University of Sfax, Sfax, Tunisia
Research Article
Working Capital Management Impact on Capital Structure and Corporate Performance: Empirical Evidence from Spain
Author(s): Sahar Loukil*
Statistical mediation analysis can help to identify and explain the mechanisms behind the linkage between capital structure and corporate performance through
the mediating effect of working capital management. We use a sample of 1149 Spanish firms in 2019. A path analysis shows that overinvesting in working capital management reduce the positive impact of internal funds on corporate performance. We show that efficient working capital management is value enhancing when a firm converges to a financial optimal level. As a robustness test, we check for the potential effect of working capital on firm’s solvency through cash and we find that holding cash has got a positive mediation effect. Thus, we prove the nonlinear relationship between working capital and firm performance and that efficient management technique through cash holding could improve the positive impact on firm&rsqu.. Read More»
DOI:
10.37421/2162- 6359.2022.11.646
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