||Working Capital Management, Operating Performance and Corporate Value: SMEs in Thailand
||Working Capital Management, Operating Performance and Corporate Value: SMEs in Thailand
||Institute of International Management (IIMBA--Master)
Working capital management
Cash conversion cycle
Return on asset
Nowadays small and medium enterprises (SMEs) in Thailand are growth rapidly. Then this research examined (1) the relationship between working capital management and their financial performance, and (2) the relationship between working capital management and corporate value for SMEs in Thailand. The sample comprised of 88 companies in seven (7) sectors (Agro and Food Industry, Consumer Products, Industrials, Property & Construction, Recourses, Services and Technology) listed in the Market for Alternative Investment (MAI) for the period of 2009 to 2013 which provided quarterly data. This study used cash conversion cycle (CCC), return on asset (ROA) and Tobin's q to serve as proxies for working capital management, companies' performance, and corporate value, respectively. Panel regression analysis is used as a method to analyze the data. The results show that there is a significant relationship between working capital management and profitability. In contrast, there are no significant relationship between working capital management and corporate value. These SMEs in Thailand are able to use working capital management for control profitability but they cannot be suitable for corporate value.
ACKNOWLEDGEMENT ..... I
ABSTRACT ...... II
TABLE OF CONTENTS ..... III
LIST OF TABLES ..... VI
LIST OF FIGURES ..... VII
CHAPTER ONE INTRODUCTION ... 1
1.1 Research Background and Motivation. .... 1
1.1.1 Importance of Working Capital Management. .. 1
1.1.2 Cash Conversion Cycles (CCC). ... 2
1.1.3 Small and Medium Enterprises in Thailand. ... 4
1.1.4 Market for Alternative Investment (MAI). .. 7
1.2 Research Objective. ..... 9
1.3 Research Gap. .... 10
1.4 Research Structure. .... 12
CHAPTER TWO LITERATURE REVIEW ... 13
2.1 Working Capital Management with Operating Performance. .. 13
2.2 The Relationship between Working Capital Management and Corporate Value...... 15
2.3 Small and Medium-Sized Enterprises (SMEs). ... 17
2.4 Working Capital Management Theory. .... 18
2.5 Other Variables. .... 20
2.5.1 The Company Size (SIZE). ... 20
2.5.2 The Sales Growth (SGROW). ... 20
2.5.3 Financial Leverage (LEV). .... 20
2.5.4 The Company Age (AGE). .... 20
2.5.5 Investment in Fixed Assets (FA). .... 20
2.5.6 Cash Flow from Operations (CFLOW). .. 21
CHAPTER THREE RESEARCH DESIGN AND METHODOLOGY .. 22
3.1 Data Sampling. ..... 22
3.2 Data Analysis. .... 25
3.2.1 The Relationship between Working Capital Management and Operating Performance. ... 28
3.2.2 The Relationship between Working Capital Management and Corporate Value. .... 28
3.3 Methodology and Model. ... 29
3.3.1 Fixed Effects Least Square Dummy Variable (LSDV). .. 30
3.3.2 Random Effects Model. ... 31
3.3.3 Hausman Test. ..... 32
CHAPTER FOUR RESEARCH RESULTS ... 33
4.1 Descriptive Statistics. ..... 33
4.2 Correlation Analysis. .... 39
4.3 Multicollinearity Analysis. ... 41
4.4 Panel Regression Data Analysis. .... 41
4.4.1 The Results of the Effect of Working Capital Management on Profitability- Overall. ... 42
4.4.2 The Results of the Effect of Working Capital Management on Profitability divided by Sectors. .... 43
4.4.3 The Results of the Effect of Working Capital Management on Corporate Value - Overall. ... 47
4.4.4 The Results of the Effect of Working Capital Management on Corporate Value divided by Sector. ... 48
CHAPTER FIVE CONCLUSION AND SUGGESTIONS ... 53
5.1 Research Conclusion. ..... 53
5.2 Research Contributions. ... 56
5.3 Research Limitation and Further Research Suggestion. .. 56
REFERENCES .... 58
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