Working Capital Strategies in Europe: Cross-country and Cross-size Analysis
Journal Title: Zarządzanie i Finanse - Year 2013, Vol 11, Issue 2
Abstract
Corporate finance literature traditionally abounds in both theoretical discussion and empirical research concerning financing and long term investment decisions. Managing short-term resources seems a much less remarkable issue, despite their significant share in a firm’s balance sheet and the time and effort needed to manage current assets and liabilities. This article provides insights into the working capital strategies in the European Union perspective from the pint of view of two factors affecting this capital. The determinants considered in the study include both external and internal factors, namely the country where a company operates and the firm’s size. The theoretical part of the paper contains literature review reflecting the impact of the selected factors on working capital management. The empirical analysis includes corporate working capital characterised by six financial ratios in three size groups of firms in nine EU countries and covers the period 2000-2010. The main regularity detected with the use of linear ranking method based on the aggregated financial ratios is the increased aggressiveness of working capital strategies with the increase of firm’s size, almost regardless of the country.
Authors and Affiliations
Julia Koralun-Bereźnicka
Keywords
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