Nonlinear Relationship Between Working Capital and Firm Performance Moderated by Financial Constraints on Manufacture Firms Listed in Indonesia Stock Exchange

DOI

10.2991/aebmr.k.200915.025How to use a DOI?

Keywords

financial constraints, firm performance, working capital, net trade cycle

Abstract

The research aims to analyze the relationship between the working capital and firm performance of manufacturing companies listed in Indonesia stock exchange (IDX). Data were obtained from 33 manufactured from 2014 to 2018 using the Eviews 9.0 multiple regression analysis methods. The outcome showed the existence of a nonlinear relationship between both parties, which applies to the rise of financial constraints. Therefore, an increase in working capital helps firms to raise their sales till a certain optimal point is achieved. It also raises cost and risks of bankruptcy. This study, therefore, provides evidence of the nonlinear relationship between working capital management and firm performance of manufactured firms listed in the IDX.

Copyright

© 2020, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Azizah Rarasati Widhyadji
AU  - Farah Margaretha Leon
PY  - 2020
DA  - 2020/09/15
TI  - Nonlinear Relationship Between Working Capital and Firm Performance Moderated by Financial Constraints on Manufacture Firms Listed in Indonesia Stock Exchange
BT  - Proceedings of the International Conference on Management, Accounting, and Economy (ICMAE 2020)
PB  - Atlantis Press
SP  - 104
EP  - 107
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.200915.025
DO  - 10.2991/aebmr.k.200915.025
ID  - Widhyadji2020
ER  -