Impact of Loan Accessibility on Working Capital Management and Profitability: Comparative Study of Family Versus Non-Family Firms
his study is conducted to identify the direction of the relationship between working capital management (WCM) and firm performance of the non-financial sector of Pakistan from 2009 till 2018. This has also looked at the effect of restricted access to loan on the WCM- Profitability relationship. The findings confirmed that restricted loan accessibility impacts the WCM-Profitability relationship. The comparative analysis demonstrated that financially constrained firms are mostly non-family firms that are new, growing, smaller in size, face high risk, maintain high liquidity and tangibility ratios than non-constrained firms. Further, the working capital levels of financially constraint firms is lower because of high operating expenses and greater capital rationing. Managers and scholars may use these findings for the administration of their working capital policies in order to avoid the financial cost and create more opportunities for financial accessibility which is further beneficial for making informed investment decisions, yielding higher profits that contribute towards sustainable growth.
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Financial Constraints, Working Capital Management, Firm Profitability, Investment Decisions, Loan Accessibility, Family Firms, Sustainable Growth
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(1) Kanwal Iqbal Khan
Assistant Professor, Institute of Business & Management,University of Engineering and Technology, Lahore, Punjab, Pakistan.
(2) Adeel Nasir
Assistant Professor,Department of Management Sciences, Lahore College for Women University, Jail Road , Lahore, Punjab, Pakistan.
(3) Aniqa Arslan
Assistant Professor, Department of Management Sciences, Shaheed Benazir Bhutto University, Shaheed Benazirabad, Karachi, Pakistan.
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Cite this article
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APA : Khan, K. I., Nasir, A., & Arslan, A. (2020). Impact of Loan Accessibility on Working Capital Management and Profitability: Comparative Study of Family Versus Non-Family Firms. Global Social Sciences Review, V(I), 220-230. https://doi.org/10.31703/gssr.2020(V-I).23
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CHICAGO : Khan, Kanwal Iqbal, Adeel Nasir, and Aniqa Arslan. 2020. "Impact of Loan Accessibility on Working Capital Management and Profitability: Comparative Study of Family Versus Non-Family Firms." Global Social Sciences Review, V (I): 220-230 doi: 10.31703/gssr.2020(V-I).23
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HARVARD : KHAN, K. I., NASIR, A. & ARSLAN, A. 2020. Impact of Loan Accessibility on Working Capital Management and Profitability: Comparative Study of Family Versus Non-Family Firms. Global Social Sciences Review, V, 220-230.
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MHRA : Khan, Kanwal Iqbal, Adeel Nasir, and Aniqa Arslan. 2020. "Impact of Loan Accessibility on Working Capital Management and Profitability: Comparative Study of Family Versus Non-Family Firms." Global Social Sciences Review, V: 220-230
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MLA : Khan, Kanwal Iqbal, Adeel Nasir, and Aniqa Arslan. "Impact of Loan Accessibility on Working Capital Management and Profitability: Comparative Study of Family Versus Non-Family Firms." Global Social Sciences Review, V.I (2020): 220-230 Print.
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OXFORD : Khan, Kanwal Iqbal, Nasir, Adeel, and Arslan, Aniqa (2020), "Impact of Loan Accessibility on Working Capital Management and Profitability: Comparative Study of Family Versus Non-Family Firms", Global Social Sciences Review, V (I), 220-230
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TURABIAN : Khan, Kanwal Iqbal, Adeel Nasir, and Aniqa Arslan. "Impact of Loan Accessibility on Working Capital Management and Profitability: Comparative Study of Family Versus Non-Family Firms." Global Social Sciences Review V, no. I (2020): 220-230. https://doi.org/10.31703/gssr.2020(V-I).23