Liquidity-profitability Tradeoff Existence in Turkey : an Empirical Investigation under Structural Equation Modeling

• Autorzy: Furkan Baser , Soner Gokten , Guray Kucukkocaoglu , Hasan Ture
• Języki publikacji: EN

Abstrakty

EN

Firms in emerging markets could show a tendency to have high liquidity positions by ignoring the liquidity-profitability tradeoff in terms of working capital management due to gained experiences from stressed times. Accordingly, this study empirically examines the validity of liquidity-profitability tradeoff in Turkish market via structural equation modeling. The functions of liquidity and profitability as latent variables of the model are constituted from Piotroski's criterias of liquidity/solvency, operating efficiency and profitability. The hypothesized model for the inexistence of the validity of liquidity-profitability tradeoff was verified and there is a moderate level of positive effect between liquidity and profitability in Turkey. The findings indicate that (1) current ratio or its variants as single-handed variables are inadequate to explain liquidity- profitability relation and (2) leverage seems to be the most important indicator as taken into account on working capital management decisions. Turkish firms apply prudent working capital management to overcome possible liquidity shocks. (original abstract)

Słowa kluczowe

EN

Working capital; Management of working capital; Structural Equation Modeling

PL

Kapitał obrotowy; Zarządzanie kapitałem obrotowym; Modelowanie równań strukturalnych

• Czasopismo: Copernican Journal of Finance & Accounting
• Rocznik: 2016
• Tom: 5
• Numer: nr 2
• Strony: 27--44

Twórcy

autor

Furkan Baser

• Ankara University, Turkey

autor

Soner Gokten

• Baskent University, Turkey

autor

Guray Kucukkocaoglu

• Baskent University, Turkey

autor

Hasan Ture

• Gazi University, Turkey

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Identyfikatory

DOI

10.12775/CJFA.2016.013