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Empirical Analysis of the Working Capital-Profitability Relationship: Consequences of the Global Financial Crisis of 2008: A Quantitative Study of Swedish Wholesale SMEs
Mid Sweden University, Faculty of Human Sciences, Department of Business, Economics and Law.
2018 (English)Independent thesis Advanced level (degree of Master (One Year)), 10 credits / 15 HE creditsStudent thesis
Abstract [en]

Purpose: The purpose of this thesis is to analyze the relationship between working capital management (measured by CCC) and firm profitability to find out whether there is a significant difference in working capital management during (2008-2009) and after (2010-2015) the global financial crisis of 2008/09 in Swedish wholesale SMEs.Design/methodology/approach: This thesis makes use of multiple correlation and multiple regression analysis to analyze a data sample of 1,532 SMEs operating in the wholesale industry.Findings: The study provides empirical evidence for a significant relationship between profitability and working capital management as well as for a significant difference in working capital management during and after the global financial crisis of 2008/09. Furthermore, the firmlevel control variables for age, size, and leverage show a significant relationship with firm profitability. This holds also true for the lagged dependent variable and the crisis dummy variable.Research limitations/implications: The present study is limited to a rather underperforming sample of SMEs operating in the Swedish wholesale industry. Further research could examine the generalizability of findings for other countries, more industries, or a greater time horizon.Practical implications: The results of this thesis can support the management of Swedish SMEs with their working capital policies to improve their profitability by reducing their CCC with special regard to economic crises. Moreover, these findings can be of interest for policy makers as well as debt- and stakeholders. Originality/value: The present study contributes to previous research by adding the perspective of small and medium-sized enterprises on the working capital-profitability relationship during and after the global financial crisis. To the best of the author’s knowledge, there exists no otherstudy addressing this issue neither in the Swedish environment nor with special regard to the wholesale industry.

Place, publisher, year, edition, pages
2018. , p. 71
Keywords [en]
Small and medium-sized enterprises, Working capital management, Global financial crisis, Firm profitability
National Category
Business Administration
Identifiers
URN: urn:nbn:se:miun:diva-34461OAI: oai:DiVA.org:miun-34461DiVA, id: diva2:1249889
Subject / course
Business Administration FE1
Supervisors
Examiners
Available from: 2018-09-20 Created: 2018-09-20 Last updated: 2018-09-20Bibliographically approved

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CiteExportLink to record
Permanent link

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Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf