A Theoretical Assessment on the Relationship between Working Capital Investment and Firm's Performance
The concept of financial constraint have a great influence on company decision and capital market entrance as shareholders and directors recognised its negative implication on firm performance. This paper is the first to conceptualize the theoretical influence of financial constraints (FC) on wor...
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Human Resource Management Academic Research Society
2022
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Online Access: | http://ir.unimas.my/id/eprint/38947/1/Working%20Capital1.pdf http://ir.unimas.my/id/eprint/38947/ http://hrmars.com/index.php/journals/archives/IJARAFMS http://dx.doi.org/10.6007/IJARAFMS/v12-i2/14353 |
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my.unimas.ir.389472023-10-02T03:20:00Z http://ir.unimas.my/id/eprint/38947/ A Theoretical Assessment on the Relationship between Working Capital Investment and Firm's Performance Jamiu Adeniyi, Akindele Asri, Marsidi Shaharudin, Jakpar Lateef, Yunusa Adamu, Babale HG Finance The concept of financial constraint have a great influence on company decision and capital market entrance as shareholders and directors recognised its negative implication on firm performance. This paper is the first to conceptualize the theoretical influence of financial constraints (FC) on working capital investment (WCI) and corporate performance through firm internal resources and managerial competency by employing a qualitative approach from a theoretical disposition which has been meagerly demonstrated in the literature. Specifically, bearing in mind the rising unpredictability and issues in the credit and capital markets that has been noticed for numbers of years and the similar intensification in regulatory capital about acquiring external financing, the attention of the firm’s gradually shifted to its internal liquidity generated from enterprise operation on the basis of working capital (WC). This study argues that business internal resources through managerial skill and internal capital can to enhance WCI in a financially constrained situation thereby reduces the agency cost and asymmetric information and increases performance. Hence, we conclude that internal funds is suitable to finance WCI in a constrained situation for managers to avoid overinvest or underinvest in working capital asset by controlling for financial constraints. Further review are expected to determine WCI-performance relationship using some vital accounting ratios largely generated from annual reports and accounts. Human Resource Management Academic Research Society 2022-06-20 Article PeerReviewed text en http://ir.unimas.my/id/eprint/38947/1/Working%20Capital1.pdf Jamiu Adeniyi, Akindele and Asri, Marsidi and Shaharudin, Jakpar and Lateef, Yunusa and Adamu, Babale (2022) A Theoretical Assessment on the Relationship between Working Capital Investment and Firm's Performance. International Journal of Academic Research in Accounting, Finance and Management Sciences, 12 (2). pp. 573-589. ISSN 2225-8329 http://hrmars.com/index.php/journals/archives/IJARAFMS http://dx.doi.org/10.6007/IJARAFMS/v12-i2/14353 |
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HG Finance Jamiu Adeniyi, Akindele Asri, Marsidi Shaharudin, Jakpar Lateef, Yunusa Adamu, Babale A Theoretical Assessment on the Relationship between Working Capital Investment and Firm's Performance |
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The concept of financial constraint have a great influence on company decision and capital
market entrance as shareholders and directors recognised its negative implication on firm
performance. This paper is the first to conceptualize the theoretical influence of financial
constraints (FC) on working capital investment (WCI) and corporate performance through
firm internal resources and managerial competency by employing a qualitative approach from
a theoretical disposition which has been meagerly demonstrated in the literature. Specifically,
bearing in mind the rising unpredictability and issues in the credit and capital markets that
has been noticed for numbers of years and the similar intensification in regulatory capital
about acquiring external financing, the attention of the firm’s gradually shifted to its internal
liquidity generated from enterprise operation on the basis of working capital (WC). This study
argues that business internal resources through managerial skill and internal capital can to
enhance WCI in a financially constrained situation thereby reduces the agency cost and
asymmetric information and increases performance. Hence, we conclude that internal funds
is suitable to finance WCI in a constrained situation for managers to avoid overinvest or
underinvest in working capital asset by controlling for financial constraints. Further review
are expected to determine WCI-performance relationship using some vital accounting ratios
largely generated from annual reports and accounts. |
format |
Article |
author |
Jamiu Adeniyi, Akindele Asri, Marsidi Shaharudin, Jakpar Lateef, Yunusa Adamu, Babale |
author_facet |
Jamiu Adeniyi, Akindele Asri, Marsidi Shaharudin, Jakpar Lateef, Yunusa Adamu, Babale |
author_sort |
Jamiu Adeniyi, Akindele |
title |
A Theoretical Assessment on the Relationship between Working Capital Investment and Firm's Performance |
title_short |
A Theoretical Assessment on the Relationship between Working Capital Investment and Firm's Performance |
title_full |
A Theoretical Assessment on the Relationship between Working Capital Investment and Firm's Performance |
title_fullStr |
A Theoretical Assessment on the Relationship between Working Capital Investment and Firm's Performance |
title_full_unstemmed |
A Theoretical Assessment on the Relationship between Working Capital Investment and Firm's Performance |
title_sort |
theoretical assessment on the relationship between working capital investment and firm's performance |
publisher |
Human Resource Management Academic Research Society |
publishDate |
2022 |
url |
http://ir.unimas.my/id/eprint/38947/1/Working%20Capital1.pdf http://ir.unimas.my/id/eprint/38947/ http://hrmars.com/index.php/journals/archives/IJARAFMS http://dx.doi.org/10.6007/IJARAFMS/v12-i2/14353 |
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13.159267 |