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Determinants of Working Capital Requirement: Evidence from Non-Financial Firms Listed on the Vietnam Exchange

Journal of Insurance and Financial Management

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Title Determinants of Working Capital Requirement: Evidence from Non-Financial Firms Listed on the Vietnam Exchange
 
Creator Cuong, Nguyen Thanh
Nhung, Nguyen Thi Hong
 
Description The purpose of this study is to examine whether non-financial firms listed on the VietNam Exchange exhibit a target working capital requirement (WCR). The study also investigate the determinants of WCR and the speed with which firms can adjust toward their target WCR. Based on a sample of 314 non-financial firms listed on the VietNam Exchange during 2010–2015, Using the Generalized Method of Moments estimation, the study found that firms pursue target levels of WCR. However, the adjustment process is relatively slow with an adjustment coefficient of 0.4573. In addition, the results also show that the WCR increased significantly with increasing in the firm’s profitability. In contrast, the WCR decreases significantly with increasing in the size and fixed investment of the firm. From the results obtained, this study provides important implications to corporate financial managers in effective management of the WCR.
 
Publisher Journal of Insurance and Financial Management
 
Contributor —
 
Date 2017-07-04
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier https://journal-of-insurance-and-financial-management.com/index.php/JIFM/article/view/90
 
Source Journal of Insurance and Financial Management; Vol 3, No 1 (2017): Journal of Insurance and Financial Management
2371-2112
 
Language eng
 
Relation https://journal-of-insurance-and-financial-management.com/index.php/JIFM/article/view/90/pdf
 
Rights Copyright (c) 2017 Nguyen Thanh Cuong
http://creativecommons.org/licenses/by/4.0