The speed of adjustment in net operating working capital: an international study

• Sonia Baños-Caballero ^[1] ; Pedro J. García-Teruel ^[1] ; Pedro Martínez-Solano ^[1]
  1. [1] Universidad de Murcia

     Universidad de Murcia

     Murcia, España

     
• Localización: Revista española de financiación y contabilidad, ISSN 0210-2412, Vol. 50, Nº 4, 2021, págs. 423-440
• Idioma: inglés
• DOI: 10.1080/02102412.2020.1864176
• Texto completo no disponible (Saber más ...)
• Resumen

  • This paper analyses whether there are differences in the speed of adjustment in net operating working capital (NWC) across countries. Unlike prior research, which reported that the adjustment speed of any current item is always rapid, we find that the speed of adjustment to NWC targets depends on a country’s investor protection and financial development. Specifically, using a sample of firms from 30 countries, we show that NWC adjustment speeds vary across countries, and they are faster for companies that operate in countries with stronger investor protection and greater financial development.

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