The Effect of Working Capital Management on the Export Performance of Small and Medium Export Enterprises: Evidence from Export Manufacturing Sector in Sri Lanka
Journal Title: Journal of Economics and Business - Year 2019, Vol 2, Issue 3
Abstract
Small and Medium Enterprises (SMEs) are critical for the development of the economy in any country and known as the backbone of industrial development in both developing and developed countries. SMEs play a key role in the economy in terms of their contribution to the national output, employment, and the number of firms operating in the country. Effective management of working capital management is necessary for a firm’s survival as well as the success of a business. It is essential to maintain a healthy working capital of Small and Medium Scale Enterprises to keep the solvency and liquidity of SMEs. The problem identified in the research was that, in Sri Lanka, 82% of SMEs are export enterprises which are expected to provide a substantial contribution to the total exports of the country, however, at present, it only contributes approximately 5% of total exports. Therefore, the main objective of the study, was to identify whether there is an effect of working capital management (WCM) practices towards the export performance of the SMEs. The respondents were chosen through a systematic sampling technique, and the responses were analyzed using SPSS version 21 to discover impact of WCM on export performance of the company. The results of the study showed that Receivable management, Inventory management, and Payable management significantly affect export performance while cash management does not have a significant effect. Findings concluded that there is a positive relationship between WCM practices and export performance of SMEs. Hence, in order to enhance the export performance, SMEs should also consider their working capital practices among other requirements.
Authors and Affiliations
D. T. K. Bernard, A. Almeida, S. Perera, H. Jayarathna, A. A. S. N. Munasighe
Keywords
Related Articles
- EP ID EP646501
- DOI 10.31014/aior.1992.02.03.117
- Views 50
- Downloads 0
Entrepreneurs Experience and Firm Innovativeness: Multiple Mediation of Attitudinal and Behavioral Competencies
This study was anchored on a postpositivism paradigm and the Theory of perceived attributes and individual innovativeness, regarding the multiple serial mediations of attitudinal and behavioral competencies in the relati...
Value Creation in a ‘Non-Producing’ Enterprise
A widely-held proposition is that an enterprise does not create value until it commences production of goods or services for external customers for monetary profit. Another related proposition is that employees in a ‘non...
A Study on the Role of Guangdong-Hong Kong-Macao Greater Bay Area Based on the Belt and Road Initiative
China’s Belt and Road Initiative aims at enhancing economic connectivity and cooperation between China and neighboring countries, and promote common prosperity. Guangdong is one of the leading economic regions of mainlan...
Is Currency Depreciation or Appreciation Expansionary in Turkey?
Based on an extended IS-MP-AS model (Romer, 2000), this paper finds that real appreciation raised real GDP in Turkey during 2002.Q2-2011.Q2 whereas real depreciation helped increase real GDP during 2011.Q3-2017.Q1. In ad...
Effect of Fiscal Policy on the Real Sector of the Nigerian Economy: A Focus on Government Capital Expenditure and Agricultural Sector Contribution to GDP
Government expenditures play key roles in the operation of all economies. It refers to expenses incurred by the government for the maintenance of itself and provision of public goods, services, and works needed to foster...