UUM Electronic Theses and Dissertation
UUM ETD | Universiti Utara Malaysian Electronic Theses and Dissertation
FAQs | Feedback | Search Tips | Sitemap

The moderating effect of economic conditions on the relationship between working capital management and firm performance in Nigeria

Sunday, Simon (2018) The moderating effect of economic conditions on the relationship between working capital management and firm performance in Nigeria. PhD. thesis, Universiti Utara Malaysia.

[thumbnail of s900783_01.pdf]
Preview
Text
s900783_01.pdf

Download (4MB) | Preview
[thumbnail of s900783_02.pdf]
Preview
Text
s900783_02.pdf

Download (2MB) | Preview

Abstract

This study adopted the pecking order and contingency theories to determine the moderating effect of inflation and interest rates on the relationship between working capital management (WCM) and firm performance. A panel data of 675 firm-year observations obtained from non-financial firms listed on the Nigerian stock exchange from 2007 to 2015 was used. The study further conducted in-depth interviews with six managers from these firms. Analysis of the secondary data was performed using the fixed effect model and the STATA statistical software while thematic analysis was employed to analyse data from the in-depth interviews. The quantitative analysis demonstrated that WCM variables (accounts receivable management, accounts payable management, inventory management, cash conversion cycle, and cash conversion efficiency) have inconsistent relationships with firm performance, measured by return on assets, return on equity, and Tobin’s Q. Also, inflation and interest rates were found to moderate the relationships between WCM variables and firm performance. Furthermore, the results revealed that the relationships between WCM variables and firm performance have an optimal level of investment that maximises returns. Moreover, the study documented that WCM variables were more significantly affected during the financial crisis period than during the period afterwards. Also, the results of the qualitative data corroborated the findings of the quantitative data. The study concluded by highlighting the practical, methodological and theoretical implications, delineating the negative effects of inflation and interest rates on WCM and establishing that, unlike prior studies, these factors have significant effects on overall firm performance over the medium and long-term periods. The study recommends that firms should be proactive in their treatment of WCM. Also, WCM should be managed and interpreted in relationship to a firm’s strategy and its macroeconomic environment.

Item Type: Thesis (PhD.)
Supervisor : Sawandi, Norfaiezah and Abdul-Hamid, Mohamad Ali
Item ID: 7748
Uncontrolled Keywords: working capital management, inflation rates, interest rates, firm performance, Nigeria
Subjects: H Social Sciences > HG Finance
Divisions: Tunku Puteri Intan Safinaz School of Accountancy (TISSA)
Date Deposited: 18 Jun 2020 06:09
Last Modified: 11 Aug 2021 07:35
Department: Tunku Intan Safinaz School of Accountancy (TISSA)
Name: Sawandi, Norfaiezah and Abdul-Hamid, Mohamad Ali
URI: https://etd.uum.edu.my/id/eprint/7748

Actions (login required)

View Item
View Item