Factors Affecting Working Capital Investment: An International Evidence
1,2,3,4 Institute of Business Studies, Kohat University of Science and Technology
5 Institute of Management Sciences, Peshawar
This study is aimed at determining the major determinants of working capital investment level by different firms across different countries, which include Pakistan, India, Singapore, Japan, Malaysia and United Kingdom. Total numbers of observations are 39,912 for 3932firms, for the time period of 14 years which is from 2001 to 2014. Independent variables in the model are firm- specific variables such operating cash flows, firm-size, profitability, long term debt, leverage ratio, GDP growth rate and assets tangibility. Result indicates that variation in working capital investments are due to both the firm-specific determinants and country-specific variables across countries which determine an efficient working capital investment.
Keywords: Working capital, Firm-size, Profitability, Leverage ratio, Assets tangibility