ORCID Profile
0000-0001-9366-0582
Current Organisations
Lebanese American University
,
Bahçeşehir Cyprus University
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Publisher: Korea Distribution Science Association
Date: 31-07-2020
Publisher: Wiley
Date: 02-07-2022
DOI: 10.1002/IJFE.2666
Abstract: Changing economic situation of a country affects working capital by influencing lenders' financing abilities, firms' business activities, and managers' decisions. Hence, this paper explores the influence of macroeconomic factors in the relationship between working capital financing and firm performance over the period of 2000–2018. Applying the two‐step generalized methods of moments, we found a non‐linear and inverted U‐shaped relationship between working capital finance (WCF) and firm performance, significantly influenced by the macroeconomic indicators that is, gross domestic product (GDP) growth, Inflation rate, and interest rate. We segregated the data regarding the global financial recession period 2008–2010 and disclosed that the non‐linear and inverted U‐shaped relationship between WCF and firm performance turns to linear and negative during this recession period. We also evaluated the role of GDP growth, inflation, and interest rate in WCF and firm performance relationship during the global recession and found that these factors do not influence the nexus during this period. Firm managers, lending agencies, and researchers may use these results in choosing the best financing options in working capital under the changing situation of macroeconomic factors. The WCF and firm performance analysis during the global recession period (2008–2010) may be the best prediction model for the current financial crisis caused by COVID‐19.
Publisher: Springer Science and Business Media LLC
Date: 08-2023
Publisher: Elsevier BV
Date: 03-2023
Publisher: World Scientific Pub Co Pte Ltd
Date: 21-05-2022
DOI: 10.1142/S2010495222500142
Abstract: This study examines the moderating role of the cash conversion cycle (CCC) while investigating the effects of working capital finance (WCF) on firm performance. Using more than 18000 observations from Chinese manufacturing firms, we computed several proxies for each variable of the study and merged these proxies via Principal Component Analysis (PCA) to create one master proxy for each variable. These master proxies contain all the essential information of in idual proxies. Hence, they are more useful in producing reliable results than in idual proxies. We also compared the predicting power of 15 econometric and machine learning estimators to select the best estimator. Based on the highest [Formula: see text] value, we used two machine learning estimators, K-Nearest Neighbors (KNN), and Artificial Neural Networks (ANN) for subsequent analysis. To strengthen the empirical analysis, we employed another machine learning technique, i.e., the Bagging method, which is an ensembling technique that uses multiple estimators simultaneously to improve the accuracy and generalization of results. We used the Bagging method with 50[Formula: see text]KNN estimators. The findings unfold that the sensitivity level of firm performance to short-term debts shifts when the CCC period of firms fluctuates. More precisely, the WCF–performance relationship in firms with extended CCC is more sensitive compared with this relationship in the full s le. On segregating the three elements of CCC, we observe that the WCF–performance relationship in firms carrying extended account receivable (AR) days or extended Inventory days is more sensitive than the full s le. These findings are useful for firms’ management for revising the optimal level of short-term debts according to CCC fluctuation. Also, the lending agencies can use these results for the assessment of firms’ risk levels and adjustment of the interest rate.
Publisher: Elsevier BV
Date: 2023
Publisher: Vilnius Gediminas Technical University
Date: 26-03-2021
Abstract: This study focuses on the moderating role of the cash conversion cycle (CCC) and its components while investigating the relationship between short-term borrowings and profitability in Chinese firms. The generalized method of moments (GMM) approach is employed on the panel data over the period 2000 to 2017. The findings reveal a significant moderating role of CCC and its components in the short-term borrowings and profitability relationship. Specifically, the firms following a conservative strategy in CCC and its components, adopt the same strategy in the external financing which lies in the long-term borrowings. Consequently, such firms require less short-term borrowings compared to the full s le. However, the firms following an aggressive strategy in the CCC and its components, do not follow the aggressive strategy in external financing that lies in the short-term borrowings. Instead, these firms adopt the conservative strategy for profit maximization and require less amount of short-term borrowings compared to the full s le. Finally, several policy options are proposed to achieve the optimum relation between short-term borrowings and profitability.
No related grants have been discovered for Zahoor Ahmed.