Recei ed: 24 Ma ch 2022
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Re ised: 19 Janua y 2023
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Accep ed: 25 Ma ch 2023
DOI: 10.1002/ag .21816
RESEARCH ARTICLE
Wo king capi al managemen and i m sales
g ow h: E idence om ish p ocessing indus y
Da id Rodei o‐Pazos
1
|Sa a Fe nández‐López
1
|
Raúl Rios‐Rod íguez
2
|Ad ián Dios‐Vicen e
2
1
Depa men o Finance and Accoun ing,
Uni e sidade de San iago de Compos ela,
Galicia, Spain
2
Depa men o Applied Economics,
Uni e sidade de San iago de Compos ela,
Galicia, Spain
Co espondence
Da id Rodei o‐Pazos, Depa men o Finance
and Accoun ing, Uni e sidade de San iago de
Compos ela, A da. do Bu go, s/n., 15782
San iago de Compos ela, Galicia, Spain.
Email: [email p o ec ed]
Abs ac
Wo king capi al managemen (WCM) is a c i ical ma e o
he g ow h o i ms, especially small and medium‐sized
manu ac u ing companies aced wi h liquidi y sho ages
whose cu en asse s accoun o a signi ican pa o hei
in es men s. These cha ac e is ics desc ibe mos compa-
nies in he ish p ocessing indus y. Using a sample o mo e
han 1050 Eu opean ish p ocessing companies du ing
he pe iod 2013–2020 and applying dynamic panel da a
me hods, his pape analyses he ex en o which wo king
capi al in es men and inancing policies a ec i m's sales
g ow h. The empi ical e idence e eals ha he ade c edi
channel (i.e., accoun s ecei able and accoun s payable)
enhances sales g ow h, while he opposi e e ec is ound
o in es men in in en o ies. Addi ionally, he indings
insis on he impo ance o inancing cu en asse s wi h
posi i e wo king capi al o boos sales g ow h. [EconLi
Ci a ions: C23, G31, L25, L79, Q22].
KEYWORDS
dynamic panel da a, i m g ow h, ish p ocessing indus y, ade
c edi policies, wo king capi al managemen
Ag ibusiness. 2023;1–25. wileyonlinelib a y.com/jou nal/ag
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This is an open access a icle unde he e ms o he C ea i e Commons A ibu ion‐NonComme cial License, which pe mi s use,
dis ibu ion and ep oduc ion in any medium, p o ided he o iginal wo k is p ope ly ci ed and is no used o comme cial pu poses.
© 2023 The Au ho s. Ag ibusiness published by Wiley Pe iodicals LLC.
Abb e ia ions: AR, au o eg essi e; EBITDA, ea nings be o e in e es axes dep ecia ion and amo iza ion; FE, ixed e ec s; GMM, gene alized me hod o
momen s; NACE, S a is ical Classi ica ion o Economic Ac i i ies; NWC, ne wo king capi al; SME, small‐and medium‐sized en e p ise; WCM, wo king
capi al managemen .
1|INTRODUCTION
The li e a u e on co po a e inance has paid li le a en ion o sho ‐ e m inancial decisions (Aminu &
Zainudin, 2015; Baños‐Caballe o e al., 2014; Nazi & A za, 2009), bu a he has ocused on inancial decisions
ha a e long‐ e m in na u e. Howe e , sho ‐ e m inancial decisions become essen ial o i m pe o mance,
especially o small‐and medium‐sized en e p ises (SMEs). Compa ed wi h la ge companies, SMEs ha e a highe
sha e o liquid asse s, lowe liquidi y, and mo e ola ile cash lows (Peel e al., 2000). Acco dingly, hey expe ience
mo e di icul ies in ob aining long‐ e m banking loans, which leads hem o ely mo e on spon aneous inancing
sou ces (i.e., acc uals and ade c edi ) and sho ‐ e m bank deb (Enow & B ijlal, 2014; Juan Ga cía‐Te uel &
Ma ínez‐Solano, 2007). These ci cums ances equi e SMEs o manage hei wo king capi al e ec i ely o ensu e
good ou comes (Howo h & Wes head, 2003; Juan Ga cía‐Te uel & Ma ínez‐Solano, 2007; Padachi, 2006; Peel &
Wilson, 1996).
No su p isingly, he numbe o s udies speci ically de o ed o wo king capi al managemen (WCM) has
lou ished since 2008 ( o e iews, see P a ap Singh & Kuma , 2014; Kayani e al., 2019; and P asad e al., 2019),
when he G ea Recession led o a sho age o liquidi y in mos wes e n economies (Sumed ea, 2013). Mos o
hese s udies ha e analyzed he e ec o WCM on i m p o i abili y, o e looking i s e ec on i m g ow h.
Howe e , i m g ow h is he mos widely used measu e o i m pe o mance (Beie & Wagne , 2017), and academics
and p ac i ione s ha e adi ionally a gued ha ne wo king capi al (NWC, o he sum o accoun s ecei able and
in en o ies minus accoun s payable) has a posi i e e ec on i m g ow h (Ak as e al., 2015; Buchmann e al., 2008).
Addi ionally, he ew s udies add essing his issue ha e mos ly igno ed he ole played by wo king capi al inancing
policies in enhancing i m g ow h.
We expec ha , as a consequence o he economic ins abili y caused by he COVID‐19 pandemic, he wa in
Uk aine, he supply c isis, inc easing in la ion, and he aise o o icial in e es a es (Eu opean Cen al Bank, 2022),
SMEs will expe ience a sho age o liquidi y simila o, o e en wo se han, ha expe ienced in he a e ma h o he
G ea Recession. In his con ex , e icien WCM becomes a undamen al d i e o i m pe o mance, especially o
manu ac u ing SMEs ha , he e o e, ha e o inance g ow h while acing c edi cons ain s. This could be he case
o i ms in he ish p ocessing indus y, which p o ides an in e es ing case s udy, as i is an unde s udied sec o
wi hin he ood indus y, while a he same ime, i has g ea po en ial o g ow h (Depelleg in e al., 2022).
The main objec i e o his pape is o analyze whe he WCM policies a ec he sales g ow h o ish p ocessing
companies. To his end, we cons uc a sample o mo e han 1050 Eu opean ish p ocessing companies o e he
pe iod 2013–2020 and apply dynamic panel da a me hods. Addi ionally, we dis inguish be ween wo king capi al
in es men and inancing policies, which allows us o gain se e al no el insigh s in o he join in luence o bo h
spon aneous inancing and o he sho ‐ e m liabili ies on i m g ow h. Also, he sample pe iod (2013–2020)
p o ides an in e es ing con ex o he analysis, as i includes a pe iod when some Eu opean coun ies we e s ill in
ecession, a pe iod o economic g ow h and a inal yea ma ked by he COVID‐19 c isis.
This pape con ibu es o he li e a u e in se e al ways. Fi s , i ex ends he limi ed li e a u e on he e ec o
WCM on i m g ow h (Kayani e al., 2019; P asad e al., 2019; P a ap Singh & Kuma , 2014). This is necessa y no
only because o he impo ance o i m g ow h as a d i e o he economic p og ess (Ghoshal e al., 1999), bu also
because whe eas in business managemen he NWC is conside ed o se e as a sou ce o inancing such i m
g ow h, his ole has no been empi ically es ed in he li e a u e on WCM (Ak as e al., 2015). Second, he use o
al e na i e p oxies o WCM allows us o dis inguish he e ec s o wo king capi al in es men and inancing
policies on sales g ow h. To da e, he sca ce li e a u e on WCM and i m g ow h has conside ed he amoun s
in es ed in accoun s ecei able and in en o ies (wo king capi al in es men policies) and he inancing p o ided by
supplie s (spon aneous inancing), neglec ing o he sho ‐ e m liabili ies ha de ine he i m's wo king capi al
inancing policies. Thi d, he geog aphical scope, analyzing da a om six di e en Eu opean coun ies (F ance, I aly,
No way, Poland, Spain, and Sweden), supposes a no el app oach o empi ical WCM s udies (Kayani e al., 2019).
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The s uc u e o he pape is as ollows. Sec ion 2ou lines he li e a u e ela ed o WCM and i m g ow h.
Sec ion 3 epo s on he da a and he a iables, as well as he econome ic me hodology. Sec ion 4p esen s he
empi ical indings. Finally, Sec ion 5d aws he main conclusions, ou lining he limi a ions and sugges ing u u e
esea ch lines.
2|LITERATURE REVIEW
The li e a u e on WCM has inc eased exponen ially since he economic c isis o 2008, which has made e icien
sho ‐ e m inancial managemen essen ial o he su i al, g ow h, and p o i abili y o companies (Kayani
e al., 2019; P asad e al., 2019; P a ap Singh & Kuma , 2014). Following P a ap Singh and Kuma (2014), his
li e a u e can be di ided in o h ee ca ego ies: (1) s udies ha ocus on wo king capi al p ac ices; (2) s udies ha
seek o explain he impac o WCM on pe o mance; and (3) s udies ha analyze o he opics ela ed o WCM, like
paymen me hods o he impac o he c isis on wo king capi al e iciency. The as majo i y o his li e a u e adop s
an empi ical app oach
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(Kayani e al., 2019; P asad e al., 2019) and analyses se e al indus ies in only one coun y,
o en loca ed in eme ging ma ke s wi h igh inancial sec o s, such as Tu key, India, o Pakis an (Kayani
e al., 2019). The p esen s udy also adop s an empi ical app oach by analyzing one single sec o in six Eu opean
coun ies, and also alls in o he second g oup p oposed by P a ap Singh and Kuma (2014), whose emphasis is on
he ela ionship be ween WCM and i m pe o mance.
While mos o he empi ical s udies a e ocused on he ela ionship be ween WCM and i m p o i abili y
(Kayani e al., 2019), in he las yea s a new wa e o wo ks has ocused on he ela ionship be ween WCM and i m
g ow h (see Table 1). Explo ing his opic is necessa y o wo main easons: Fi s , i m g ow h is one o he mos
widely used measu es o i m pe o mance in economics (Beie & Wagne , 2017), e lec ing ma ke accep ance and
i m success (Feese & Willa d, 1990). Second, se e al s udies ha e ela ed i m g ow h o WCM in a heo e ical
way. Thus, acco ding o Ak as e al. (2015), e icien WCM can inc ease sales and ea nings, leading a company o
highe g ow h a es. While hese a gumen s come om an in es men pe spec i e, a ew p ac i ione ‐o ien ed
a icles ha e also emphasized he ole o NWC as a d i e o i m g ow h (Ak as e al., 2015) by ocusing on i s
po en ial as a sou ce o unding (i.e., om a inancing pe spec i e). In his espec , Buchmann e al. (2008) s ess
ha he powe o NWC as a po en ial sou ce o cash o und g ow h is o en o e looked by i ms.
Thus, om a wo king capi al in es men app oach, g an ing ade c edi allows o implici p ice disc imina ion
ac oss cus ome s when i is no possible o do i di ec ly based on p ices (Abuhommous, 2017; Ak as e al., 2015;
Fe ando & Mulie , 2013). In such cases, i ms wi h high‐p o i ma gins can each less c edi wo hy cus ome s,
inc easing hei sales and ma ke sha e (Pe e sen & Rajan, 1997). Selling on c edi also se es o educe he
unce ain y abou he quali y o a i m's p oduc among po en ial cus ome s ( he asymme ic in o ma ion p oblem)
by allowing hem o e i y he quali y be o e paying (Smi h, 1987). Cheng and Pike (2003) and Pike e al. (2005) ind
empi ical e idence suppo ing he p oduc quali y a gumen o i ms wi h a less es ablished epu a ion, namely
young and small i ms. Finally, ade ecei ables a e p o en o be a use ul ool o inance cus ome s in empo a y
s ess who o he wise canno a o d o buy he p oduc s (Abuhommous, 2017; Ak as e al., 2015; Fe ando &
Mulie , 2013). Delaying paymen s educes cus ome s' inancial oubles and inc eases u u es sales by os e ing a
long‐las ing ela ionship wi h hem (Cuña , 2007; Ma ínez‐Sola e al., 2014).
F om an asse managemen app oach, in en o ies a e ano he keyway in which WCM can be used o boos
g ow h (Hill e al., 2010), con ibu ing o educed o de cos s (Blinde & Maccini, 1991) and allowing companies o
each economies o scale by dec easing p oduc ion cos s (Fazza i & Pe e sen, 1993). A he same ime, in en o ies
p e en s ock‐ou p oblems (Ak as e al., 2015; Co s en & G uen, 2004; Deloo , 2003) and possible p oduc ion
1
Kayani e al. (2019) no es ha almos 90% o a sample o s udies be ween 1980 and 2017 adop ed an empi ical app oach ins ead
o concep ual and su ey‐based app oaches.
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TABLE 1 Summa y o empi ical esea ch.
Re e ences Sample (Yea s)
Measu es o g ow h ( ela ionship
wi h WCM) Measu es o WCM
Es ima ion
me hods Independen and con ol a iables
Fe ando and
Mulie (2013)
600,000 non inancial
i ms, eigh eu o a ea
coun ies
a
(1993–2009)
Added alue g ow h a e
(+)
Added alue = P o i /
Loss –in e es – axa ion –em-
ployee –dep ecia ion –in e es
paid
T ade
c edi = ( ecei ables + payables)/
o al sales
Fi s di e ence
GMM
es ima ion
Bank loans, sales g ow h, size, age,
Abuhommous
(2017)
111 non inancial lis ed
i ms, Jo dan
(1999–2015)
Sales g ow h a e
(+)
NWC = (in en o ies +
ecei ables –payables)/sales
e enue
Reg ession
model
Size, age, in e nal cash low, ex e nal
deb , Tobin's Q
Mega a alli and
Sampagna o
(2019)
22,233 manu ac u ing
amily SMEs, only
high‐g ow h i ms,
I aly (2010–2014)
Sales g ow h a e
(−)
Log (in en o y) P obi
eg ession
Liquidi y, sol ency, age, cash low,
indus y, p o ince
Huang
e al. (2019)
20,089 A‐sha e lis ed
i ms, China
(2003–2017)
Sus ainable g ow h a e (SGR)
(+)
SGR = P × A × T × R/(1 −P×A×T×R)
P = P o i ma gin (p o i / o al sales)
A = Asse u no e a io ( o al sales/
o al asse s
T = Le e age ac o ( o al asse s/end‐
o ‐pe iod equi y)
R = Re en ion a io ( e ained
ea nings/p o i )
T ade c edi = (accoun s
payable + no es
payable + ad ance ecei able)/
o al asse s
Reg ession
model
Size, age, sho ‐ e m deb , long‐ e m
deb , inancial slack, in e nal
und, cu en asse s/cu en
liabili ies, p o i s, cash low,
in e nal con ol quali y index,
managemen indica o s
(owne ship, numbe o boa d
di ec o s), egional and inancial
indica o s (de elopmen o he
c edi ma ke , compe i ions in
he inance indus y, social us ,
numbe o chambe o
comme ce)
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TABLE 1 (Con inued)
Re e ences Sample (Yea s)
Measu es o g ow h ( ela ionship
wi h WCM) Measu es o WCM
Es ima ion
me hods Independen and con ol a iables
Hani (2019) 257 non inancial i ms,
Pakis an (2001–2015)
Added alue g ow h a e
(+)
Added alue = P o i /
Loss –in e es – axa ion –em-
ployee –dep ecia ion –in e es
paid
Accoun ecei able/ o al sales
Accoun payable/ o al pu chases
Fixed e ec s
es ima ion
GMM
es ima ion
Size, age, mac oeconomic a iables
(GDP, in la ion a e)
Hussain
e al. (2021)
248 non inancial
companies om ou
sec o s ( ex ile, ood
and suga , mo o
ehicles and aile s
and au o pa s, uel
and ene gy), Pakis an
(2011–2020)
Sales g ow h a e (mixed esul s by
sec o )
T ade c edi = accoun ecei ables/
o al asse s
T ade deb = sales/ o al asse s
Seemingly
un ela ed
eg ession
model
Lagged sales g ow h, size, age,
capi al s uc u e, p o i abili y,
inancial le e age
Le eb e (2021) Small e ail companies,
F ance (2010–2017)
Sales g ow h a e (+) NWC = (in en o ies + ecei ables –
payables)/sales e enue
Random
e ec s
es ima ion
Age, size, cash low, le e age,
inancial slack (cash and
equi alen s/ o al asse s), ixed
asse s g ow h, angible asse s/
o al asse s, p o i abili y
Abb e ia ions: GMM, gene alized me hod o momen ; NWC, ne wo king capi al; SME, small‐and medium‐sized en e p ises; WCM, wo king capi al managemen .
a
Belgium, Ge many, Spain, Finland, F ance, I aly, Ne he lands, and Po ugal.
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dis up ion (Juan Ga cía‐Te uel & Ma ínez‐Solano, 2007), p o ec ing he company om po en ially e y cos ly
si ua ions and minimizing isks wi hin he p oduc ion chain. The e icien managemen o in en o ies also educes
he impac s om inpu p ice ola ili y (Blinde & Maccini, 1991), ac ing as a de ensi e s a egy agains la ge
a ia ions in ma ke p ices. As Ak as e al. (2015) ecognize, hese elemen s a e e en mo e impo an o i ms wi h
low ini ial le els o wo king capi al.
F om a wo king capi al inancing pe spec i e, accoun s payable can be unde s ood as he amoun o unds
ob ained om supplie s o inance cu en asse s. Acco ding o Fe ando and Mulie (2013), g ow h is posi i ely
ela ed o highe p oduc ion cos s, which means ha a i m con on ed wi h a liquidi y sho age will ely mo e on
ade c edi . While Bougheas e al. (2009) ind suppo o his ela ionship in a heo e ical model wi hou bank loans,
o he s udies conclude ha accoun s payable a e an al e na i e sou ce o inancing p oduc ion in con ex s (e.g.,
coun ies, sec o s, o high‐g ow h i ms) whe e o he sou ces o inance (i.e., bank loans) a e no eadily a ailable
(Cuña , 2007; Fe ando & Mulie , 2013; Fisman & Lo e, 2003). In o he wo ds, in en i onmen s wi h poo ly de eloped
inancial ma ke s o a sho age o liquidi y, aking ade c edi can ac as a subs i u e o sho ‐ e m bank loans.
Despi e he abo e‐men ioned a gumen s in a o o a posi i e ela ionship be ween he i ems o NWC and i m
sales g ow h, he s udies ha e yielded mixed esul s. Abuhommous (2017) and Le eb e (2021) analyze his
ela ionship explici ly and ind a posi i e impac o NWC on i m sales g ow h. Acco ding o Abuhommous (2017),
in es men in wo king capi al is mo e likely o lead o highe g ow h a es in he case o smalle and younge i ms.
Le eb e (2021) also concludes ha his posi i e ela ionship is s onge o small ( e ail) companies pe aining
o a business g oup, especially when hey a e in u al a eas and in c isis pe iods. We should unde line ha bo h
au ho s use he “con en ional”measu e o NWC; ha is, accoun s payable a e sub ac ed om he sum o accoun s
ecei able and in en o ies. The e o e, hey implici ly p opose a nega i e ela ionship be ween spon aneous
inancing and i m g ow h.
In a ecen s udy no di ec ly ocused on WCM, Mega a alli and Sampagna o (2019) ind he opposi e esul
a e analyzing he de e minan s o being a high‐g ow h i m, using a sample o 22,233 I alian manu ac u ing SMEs.
The au ho s conclude ha he le el o wo king capi al, measu ed as he log o in en o ies, is nega i ely ela ed o
he p obabili y o ha ing expe ienced sales g ow h a es g ea e han 20% o wo consecu i e pe iods.
While he h ee p e ious s udies unconsciously adop a wo king capi al in es men app oach, Fe ando and
Mulie (2013) d aw on a wo king capi al inancing app oach. Mo e speci ically, hei s udy aims o analyze he e ec
o ade c edi on i m g ow h, ins ead o conside ing all elemen s o NWC join ly. In so doing, he au ho s
emphasize he ole o accoun s payable as an al e na i e sou ce o inance p oduc ion. Mo eo e , hey go u he
and a ibu e ha same ole o accoun s ecei able, since i ms can ob ain sho ‐ e m bank loans (e.g., h ough bill
discoun ing, ac o ing, o c edi insu ance) once hei ecei ables a e pledged as colla e al. To es hei hypo hesis,
he au ho s conside he ade c edi channel, measu ed as he sum o accoun s payable and accoun s ecei able, as
he key independen a iable. By adding he accoun s ecei able, hey a e in oducing he impo ance o
conside ing sho ‐ e m liabili ies o he han spon aneous inancing. Indeed, using a sample o 600,000 non inancial
i ms, Fe ando and Mulie (2013) ind ha he ade c edi channel has a mo e signi ican impac on i m g ow h in
coun ies whe e he supply o bank loans o deb secu i ies is smalle (Spain, I aly, and Po ugal), and o young and
small i ms, because such i ms a e mo e sensi i e o inancial ma ke impe ec ions.
Hani (2019) eplica es he analysis o Fe ando and Mulie (2013) by es ing sepa a ely he e ec o accoun s
payable and accoun s ecei able on he g ow h o alue‐added. The esul s also suppo a posi i e ela ionship
be ween ade c edi channel and i m g ow h o bo h wo king capi al i ems. Huang e al. (2019) ind he same
posi i e ela ionship be ween he (agg ega e) ade c edi channel and sus ainable g ow h.
I wo h o no e ha esul s may be di e en depending on he indus y, since economic ac i i y sec o s ha e
di e en cha ac e is ics. This is he app oach o Hussain e al. (2021), whose wo k analyses companies om ou
di e en sec o s in Pakis an, inding mixed esul s be ween hem. This sec o ial app oach poin s ou ha in e nal
cha ac e is ics o companies om conc e e ac i i ies lead WCM o di e en ou comes ela ed o i m g ow h.
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15206297, 0, Downloaded om h ps://onlinelib a y.wiley.com/doi/10.1002/ag .21816 by Uni e sidade de San iago de Compos ela, Wiley Online Lib a y on [20/06/2023]. See he Te ms and Condi ions (h ps://onlinelib a y.wiley.com/ e ms-and-condi ions) on Wiley Online Lib a y o ules o use; OA a icles a e go e ned by he applicable C ea i e Commons License
As we ha e jus seen, he e a e ew s udies on he impac o NWC on i m sales g ow h and, in addi ion, hei
esul s a e no conclusi e. Mo eo e , based on ou e iew o he li e a u e, we can conclude ha he ex an s udies
ha e only conside ed he amoun s in es ed in cu en asse s and/o he inancing p o ided by supplie s
(spon aneous inancing). Indeed, he o me minus he la e de e mines he NWC, o he unds needed o inance
he i m's daily ope a ional ac i i ies. Howe e , he ques ion o how his inancial equi emen o NWC is unded
has mos ly been igno ed by he li e a u e. In o he wo ds, he s udies p o ide an incomple e iew o wo king capi al
inancing policies, as hey do no conside sho ‐ e m liabili ies o he han spon aneous inancing.
In his espec , co po a e inance ex books ypically ad oca es ha long‐ e m esou ces should a leas inance
ixed asse s, and i he e is a su plus (long‐ e m esou ces minus ixed asse s), his should also inance a pa o he
NWC (Kleiman & Shulman, 1988). These addi ional long‐ e m inancial esou ces o inancing day‐ o‐day ac i i ies
a e known as “wo king capi al.”The o he pa o he NWC is inanced wi h nonspon aneous sho ‐ e m liabili ies,
mainly bank deb in he case o SMEs. E en when sho ‐ e m bank deb is no a di ec ac o in calcula ing he
NWC, i implici ly becomes a eason o educe NWC since se e al s udies ha e ound ha small companies
(Ca pen e & Pe e sen, 2002) and companies based in coun ies wi h a igh inancial sec o (Fe ando &
Mulie , 2013) ha e big p oblems in accessing bank deb .
Mo eo e , he balance be ween long‐ e m and sho ‐ e m sou ces o unding o co e he inancial
equi emen s o NWC is ele an o i m g ow h, since sho ‐ e m and long‐ e m deb a e no pe ec ly
subs i u able p oduc s. Thus, sho ‐ e m bank deb is iskie han long‐ e m deb because i mus be egula ly
enego ia ed o e sho pe iods o ime, and a he ime o enego ia ion he condi ions o he company, o he
con ex , may ha e changed and he company may no be able o aise he necessa y unds o i s day‐ o‐day
ac i i ies and i s g ow h.
In his pape , we analyze whe he he in es men in NWC, as well as he way in which i is inanced, in luences
he i m sales g ow h o ish p ocessing indus y. Al hough he a gumen s ela ing o NWC and i m g ow h migh
be ex ended o almos any manu ac u ing sec o , he ish p ocessing indus y is pa icula ly well sui ed o he s udy
o his opic: i has expanded i s p oduc ion conside ably in he las decade (Figu e 1), and is expec ed o con inue o
do so in he nea u u e (Depelleg in e al., 2022). The ish p ocessing indus y al eady has an impo an impac on
he analyzed economies, ep esen ing almos 2% o he o al p oduc ion alue in manu ac u e s o he six selec ed
coun ies (Eu os a , 2022).
FIGURE 1 Fish p ocessing indus y p oduc ion alue (million €). Sou ce: Own elabo a ion based on Annual
de ailed en e p ise s a is ics o indus y. Eu os a (2022).
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Addi ionally, he selec ed coun ies p o ide an in aluable con ex o he analysis. As men ioned, he limi ed
inancial esou ces o SMEs and hei s ong dependence on bank lending (Kon ogeo gos e al., 2017) make WCM
especially ele an o his kind o i ms in a pe iod o a c edi c unch (Fe nández‐López e al., 2020). In his espec ,
he sha e o SMEs in he ish p ocessing indus y in he selec ed coun ies is nea ly 96%.
3|METHODOLOGY
3.1 |Sample and da a
The s udy ocused on i ms in he p ocessing and p ese ing o ish, c us aceans and molluscs indus y,
whose S a is ical Classi ica ion o Economic Ac i i ies (NACE) ou ‐digi code is 1020. The da a we e
ob ained om he Bu eau an Dijk ORBIS da abase, which con ains inancial in o ma ion on companies in
Eu opean coun ies.
To build a ep esen a i e sample o he sec o , he i s s ep was o sea ch in Eu os a (2022)
2
o hose
Eu opean coun ies wi h he la ges numbe o i ms in he NACE code 1020 in 2013, he 1s yea o he s udy
pe iod. Speci ically, o selec he coun ies o include in he sample, a coun y had o mee he condi ion o ha ing a
leas 200 companies in he ish p ocessing indus y. This h eshold was se conside ing ha he numbe o i ms in
an indus y wi h a ailable da a in ORBIS is usually smalle han he o al numbe o i ms ac ually exis ing in ha
indus y, and ha a lowe numbe o i ms pe coun y migh make di icul he use o dynamic panel da a
echniques. Thus, he ollowing coun ies we e selec ed: Spain (640 i ms), No way (466), I aly (395), F ance (351),
Uni ed Kingdom (323), Poland (280), Sweden (223), and Ge many (204).
Fo hese coun ies, we pe o med a sea ch in ORBIS da abase in Ma ch 2022 using he NACE code 1020,
e ie ing da a o he pe iod 2012–2021.
3
Gi en ha only 27 companies had p o ided da a o 2021, in con as o
mo e han 1300 in he o he yea s, his yea was no included in he s udy. A his poin , he ini ial sample included
3573 unique i ms.
We sc eened he da a ollowing he basic ules o he Gene ally Accep ed Accoun ing P inciples. Mo e
speci ically, obse a ions we e excluded i any o he ollowing we e ound: (1) accoun s ecei able o in en o ies
we e g ea e han liquid asse s o nega i e, (2) accoun s payable we e g ea e han liquid liabili ies o nega i e, (3)
sales we e nega i e, (4) long‐ e m deb o sho ‐ e m deb we e nega i e, and (5) o al asse s we e below 3000
eu os (i.e., i ms wi h no enough asse s o ope a e). Since he analysis ocuses on a dynamic a iable such as sales
g ow h a es, companies c ea ed a e 2018 we e also dis ega ded.
A e he applica ion o hese il e s, annual sales g ow h a es we e calcula ed and i was ound ha bo h he
UK and Ge many had 50 o ewe obse a ions in each yea , which would impede o apply panel da a echniques
when analyzing each coun y indi idually, so hese wo coun ies we e disca ded. Finally, we elimina ed he
obse a ions wi h 5% ex eme alues in he dependen a iable.
In summa y, a e he cleaning p ocess, he inal sample included 2663 unique i ms and a o al o 9656
obse a ions o he dependen a iable. Figu e 2de ails he numbe o obse a ions o he ini ial sample and he
inal sample pe yea and coun y. I should be no ed ha his is a s ongly unbalanced panel da a, as a high numbe
o i ms en e o exi he sample h oughou he pe iod o s udy. In addi ion, many companies/obse a ions will no
be included in he econome ic models because hey lack da a ei he on he dependen a iable o a leas 3 o
mo e consecu i e yea s, o on any o he o he independen and con ol a iables, which g ea ly educes he
numbe o companies in he mul i a ia e analyses.
2
h ps://ec.eu opa.eu/eu os a /da ab owse / iew/SBS_NA_IND_R2__cus om_3253641/de aul / able?lang=en.
3
ORBIS only has da a a ailable o he las 10 yea s, which is why we e ie ed da a om 2012 onwa ds.
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3.2 |Es ima ion s a egy and model speci ica ion
We used he dynamic panel da a me hods o es he in luence o wo king capi al in es men and inancing policies
on i m g ow h. Me hodological and heo e ical issues mo i a ed his choice. Fi s , unlike he OLS eg ession, panel
da a allow us o con ol o indi idual he e ogenei y, ha is, he i m's unobse able e ec s ha could a ec he
g ow h and a e indi idually associa ed wi h each o he companies (α
i
). Thus, he e o e m in he models is spli
in o h ee componen s: he unobse ed i m‐speci ic e ec men ioned abo e (α
i
), a ime componen o cap u e he
e ec o mac oeconomic ac o s on i m g ow h (λ
), and inally he andom dis u bance (ε
i
).
4
In his way, he isk o
ob aining biased esul s was educed (Bal agi, 2008).
Second, he economic li e a u e has claimed he need o an au o eg essi e (AR) amewo k in he empi ical
s udy o i m g ow h since i was heo e ically p oposed by Gib a 's (1931) Law o P opo iona e E ec . Acco ding
o his law, he p obabili y o a i m o g ow (o sh ink) du ing a gi en pe iod is he same o all i ms in a sec o
ega dless o he size o each i m a he beginning o he pe iod; in o he wo ds, i m g ow h and i m size a e no
ela ed (Mans ield, 1962). Techniques o dynamic panel es ima ion a e mo e sui able me hods o cap u e he
dynamic na u e o i m g ow h as hey allow he inclusion o a lagged dependen a iable in he igh ‐side equa ion
wi hou bias (unlike ixed e ec s es ima o ). Mo eo e , he gene alized me hod o momen s (GMM) p ocedu e
allows o exploi also he lagged alues o he explana o y a iables as ins umen s, gaining e iciency in es ima ion
o e he ixed e ec s (FE) me hods (E dinç, 2013). Mo e speci ically, ollowing Fe ando and Mulie (2013), we used
an augmen ed e sion o he Law o P opo iona e E ec .
Thi d, endogenei y a ibu able o he e e se causali y p oblem may a ise since he dependen a iable ( i m
g ow h) may also explain some o he independen a iables o he model like he i m's deb . In pa icula , since he
GMM es ima o s a e ins umen al a iable es ima o s hey allow us o accoun o he endogenei y o all he ime‐
a ying explana o y a iables (Pindado e al., 2014). Thus, he basic speci ica ion o he model is as ollows:
FIGURE 2 Numbe o companies wi h obse a ions o he dependen a iable (sales g ow h) pe yea and
coun y (2013–2020).
4
ε
i
is no mally dis ibu ed wi h mean 0 and a iance σ
ε
2
.
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Di e en models a e es ima ed. Models 1–3 ake in o conside a ion he indi idual e ec o each accoun ing
i em o NWC on sales g ow h, and Models 4 and 5 es he join e ec o he h ee accoun ing i ems o NWC.
While Model 4 uses he con en ional de ini ion o NWC, Model 5 employs he de ini ion based on Fe ando and
Mulie 's (2013) app oach (nwc2_ a). All he models include he wo king capi al inancing policy by adding he
nonspon aneous sho ‐ e m liabili ies in he es ima ions (s deb _nwc).
As i can be seen in Table 5, he wo king capi al in es men and inancing policies a e ela ed o sales
g ow h. G an ing ade c edi ( ecei _ a) inc eases he i m's sales g ow h a e, suppo ing he a gumen s in
a o o a posi i e ela ionship be ween hese wo a iables. In acco dance wi h he WCM li e a u e, selling on
c edi enables sales g ow h by allowing cus ome s o check he quali y o goods be o e paying o hem
(Cheng & Pike, 2003; Pike e al., 2005). This eason is especially ele an o i ms wi h a less well‐es ablished
epu a ion (i.e., small and young i ms). In his espec , a ound 60% o he i ms in he sample a e small and
mic o companies. T ade ecei ables can also wo k as a ool o p ice disc imina ion (Abuhommous, 2017;
Ak as e al., 2015; Fe ando & Mulie , 2013), allowing a i m wi h high‐p o i ma gins o each less
c edi wo hy cus ome s (Pe e sen & Rajan, 1997) and o inc ease i s ma ke sha e. Conce ning his a gumen ,
i should be no ed ha ou in e e y i e obse a ions shows a p o i ma gin (measu ed as EBIT di ided by
o al sales) highe han 5%, a nonnegligible igu e conside ing ha he ish p ocessing companies ope a e in a
ma u e indus y. Addi ionally, he esul ob ained is consis en wi h ha o Hani (2019), Huang e al. (2019),
and Fe ando and Mulie (2013), al hough he las au ho s a ibu e his posi i e ela ionship o he possibili y
o using accoun s ecei able o ob ain sho ‐ e m bank loans h ough bill discoun ing, ac o ing o c edi
insu ance.
Con a y o wha we expec ed, in en o ies (in en _ a) ha e a nega i e impac on sales g ow h. This esul
is simila o ha epo ed by Mega a alli and Sampagna o (2019) o high‐g ow h i ms. I seems ha he
nega i e ela ionship be ween in es men in in en o ies and sales g ow h also holds o a ma u e sec o such
as he ish p ocessing indus y, whe e i is e y di icul o ind exponen ial g ow h a es. The e o e, he
a gumen s in a o o main aining high le els o in en o ies o educe isks o s ock‐ou (Ak as e al., 2015;
Co s en & G uen, 2004;Deloo ,2003) and p oduc ion dis up ion (Juan Ga cía‐Te uel & Ma ínez‐
Solano, 2007) a e no suppo ed by ou es ima ions.
As occu s wi h accoun s ecei able, accoun s payable (pay_ a) shows a posi i e ela ionship wi h sales g ow h.
This esul is consis en wi h ha ob ained by Hani (2019), Huang e al. (2019), and Fe ando and Mulie (2013),
who ind a posi i e e ec o ade c edi on i ms' g ow h. This inding sugges s ha ade c edi wo ks as an
al e na i e sou ce o unding o a i m's daily ope a ional ac i i ies, especially in con ex s whe e i ms a e
inancially cons ained (Fe ando & Mulie , 2013; Fisman & Lo e, 2003).
When he NWC is adi ionally de ined (nwc1_ a), i has a nonsigni ican nega i e impac on sales g ow h.
Incon as ,whenweassumeaposi i ee ec o accoun spayable(nwc2_ a),we ind heopposi e esul .
These indings ein o ce he p e ious esul : he highe he amoun o NWC inanced by supplie s, he highe
he i m's g ow h, emphasizing he ole o he wo king capi al inancing policies, pa icula ly spon aneous
inancing, in enabling i m sales. Again, hese esul s a e in line wi h hose o Fe ando and Mulie (2013)and
a e con a y o hose o Abuhommous (2017) and Le eb e (2021), who using he con en ional de ini ion o
NWC ound a posi i e impac on i m sales g ow h.
In con as , he a iable measu ing he pe cen age o NWC inanced wi h sho ‐ e m deb (s deb _nwc)is
nonsigni ican ly ela ed o i m g ow h. In his espec , he esul s do no a ibu e a ele an ole o cu en
liabili ies nego ia ed. Howe e , he a io o long‐ e m deb o ixed asse s (l deb _ a)doesha eaposi i e
in luence on sales g ow h, indica ing ha he highe he pe cen age o long‐ e m deb used o inance he
ixed asse s, he highe he sales g ow h. Mo e in de ail, desc ip i e s a is ics ha e shown ha he a e age
a io o long‐ e m deb o ixed asse s is g ea e han 1 in all he yea s analyzed, which would indica e ha , on
a e age, companies ope a e wi h posi i e wo king capi al (e en be o e conside ing equi y) and ha he e is a
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TABLE 6 Robus ness analyses.
ecei _ a (Model 1) in en _ a (Model 2) pay_ a (Model 3) nwc1_ a (Model 4) nwc2_ a (Model 5)
GMM sys em es ima ion NWC a iable (S d E ) 0.179** (0.086) 0.183** (0.075) 0.112 (0.093) 0.123** (0.050) 0.124*** (0.045)
s deb _nwc (S d E ) 0.000 (0.000) 0.000 (0.000) 0.000 (0.000) 0.000 (0.000) 0.000 (0.000)
Obse a ions/ i ms 5264/1248 5643/1248 5637/1248 5648/1248 5648/1248
Ins umen s 172 172 172 172 172
pValue AR(1)/AR(2) 0.000/0.402 0.000/0.585 0.000/0.549 0.000/0.601 0.000/0.637
pValue Sa gan/JHansen 0.000/0.000 0.000/0.000 0.000/0.000 0.000/0.000 0.000/0.000
Fi s di e ence GMM es ima ion: SME
( <250 employees)
NWC a iable (S d E ) 0.280**** (0.050) −0.234**** (0.082) 0.251****
(0.054)
−0.046 (0.043) 0.137**** (0.030)
s deb _nwc (S d E ) −0.000 (0.000) −0.000 (0.000) 0.000 (0.000) −0.000 (0.000) −0.000 (0.000)
Obse a ions/ i ms 4031/1033 4032/1033 4021/1032 4036/1033 4036/1033
Ins umen s 38 38 38 38 38
pValue AR(1)/AR(2) 0.000/0.135 0.000/0.141 0.000/0.190 0.000/0.240 0.000/0.217
pValue Sa gan/JHansen 0.050/0.219 0.068/0.262 0.080/0.291 0.091/0.292 0.071/0.255
Fi s di e ence GMM es ima ion: Spain NWC a iable (S d E ) 0.564**** (0.108) −0.219** (0.100) 0.530****
(0.113)
−0.058 (0.070) 0.335**** (0.062)
s deb _nwc (S d E ) −0.004 (0.003) −0.004 (0.003) −0.004 (0.003) −0.003 (0.003) −0.003 (0.003)
Obse a ions/ i ms 1487/327 1486/327 1472/326 1487/327 1487/327
Ins umen s 33 33 33 33 33
pValue AR(1)/AR(2) 0.000/0.603 0.000/0.912 0.000/0.624 0.000/0.910 0.000/0.551
pValue Sa gan/JHansen 0.002/0.096 0.005/0.081 0.021/0.226 0.008/0.092 0.012/0.184
Fi s di e ence GMM es ima ion: No way NWC a iable (S d E ) 0.338** (0.167) −0.550*** (0.187) 0.308*** (0.102) −0.186** (0.091) 0.079 (0.085)
s deb _nwc (S d E ) −0.000 (0.000) −0.000 (0.000) 0.000 (0.000) 0.000 (0.000) −0.000 (0.000)
(Con inues)
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TABLE 6 (Con inued)
ecei _ a (Model 1) in en _ a (Model 2) pay_ a (Model 3) nwc1_ a (Model 4) nwc2_ a (Model 5)
Obse a ions/ i ms 933/277 933/277 933/277 933/277 933/277
Ins umen s 33 33 33 33 33
pValue AR(1)/AR(2) 0.000/0.446 0.000/0.199 0.000/0.527 0.000/0.418 0.000/0.575
pValue Sa gan/JHansen 0.147/0.070 0.245/0.161 0.149/0.082 0.227/0.155 0.188/0.102
Fi s di e ence GMM es ima ion: I aly NWC a iable (S d E ) 0.115** (0.054) −0.036 (0.181) 0.124 (0.077) 0.011 (0.069) 0.072** (0.034)
s deb _nwc (S d E ) −0.000 (0.000) −0.000 (0.000) −0.000 (0.000) −0.000 (0.000) −0.000 (0.000)
Obse a ions/ i ms 981/220 981/220 981/220 981/220 981/220
Ins umen s 33 33 33 33 33
pValue AR(1)/AR(2) 0.000/0.095 0.000/0.099 0.000/0.102 0.000/0.103 0.000/0.104
pValue Sa gan/JHansen 0.000/0.064 0.000/0.064 0.000/0.063 0.000/0.066 0.000/0.068
Fi s di e ence GMM es ima ion: F ance NWC a iable (S d E ) 0.279 (0.185) −0.394 (0.312) 0.761*** (0.249) −0.266 (0.199) 0.277** (0.132)
s deb _nwc (S d E ) 0.001** (0.000) 0.001 (0.000) 0.000 (0.000) 0.000 (0.001) 0.001 (0.000)
Obse a ions/ i ms 218/77 218/77 218/77 218/77 218/77
Ins umen s 33 33 33 33 33
pValue AR(1)/AR(2) 0.001/0.142 0.001/0.052 0.003/0.073 0.001/0.038 0.002/0.205
pValue Sa gan/JHansen 0.033/0.185 0.032/0.155 0.014/0.137 0.022/0.107 0.022/0.166
Fi s di e ence GMM es ima ion: Poland NWC a iable (S d E ) 0.148 (0.350) 0.494 (0.460) 0.375 (0.232) 0.086 (0.243) 0.278 (0.170)
s deb _nwc (S d E ) −0.002 (0.004) 0.000 (0.005) −0.002 (0.004) −0.002 (0.004) −0.001 (0.004)
Obse a ions/ i ms 176/75 175/74 176/75 176/75 176/75
Ins umen s 30 30 30 30 30
pValue AR(1)/AR(2) 0.181/0.124 0.096/0.083 0.099/0.105 0.173/0.120 0.061/0.109
pValue Sa gan/JHansen 0.000/0.042 0.000/0.006 0.000/0.032 0.000/0.028 0.000/0.019
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TABLE 6 (Con inued)
ecei _ a (Model 1) in en _ a (Model 2) pay_ a (Model 3) nwc1_ a (Model 4) nwc2_ a (Model 5)
Fi s di e ence GMM es ima ion: Sweden NWC a iable (S d E ) 0.460**** (0.130) −0.384*(0.199) 0.030 (0.104) 0.089 (0.080) 0.078 (0.066)
s deb _nwc (S d E ) 0.002**** (0.001) 0.002**** (0.001) 0.002****
(0.001)
0.002**** (0.001) 0.002**** (0.001)
Obse a ions/ i ms 417/96 419/96 422/96 422/96 422/96
Ins umen s 33 33 33 33 33
pValue AR(1)/AR(2) 0.001/0.665 0.000/0.350 0.000/0.779 0.000/0.806 0.000/0.867
pValue Sa gan/JHansen 0.388/0.835 0.289/0.752 0.263/0.664 0.270/0.684 0.312/0.736
No e: The able shows he wo‐s ep es ima ion esul s. The es ima ed models include all he con ol a iables, excep ing he coun y a iables in hose es ima es e e ed o an indi idual
coun y. Robus s anda d e o s a e in pa en heses.
*p< 0.10.
**p< 0.05.
***p< 0.01.
****p< 0.001.
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cushion o long‐ e m esou ces o inance sho ‐ e m asse s. This would explain why aded cu en liabili ies
a elessu ilized,and he e o edono ha easigni ican e ec on hesalesg ow ho ishp ocessing i ms.
Finally, some o he con ol a iables also in luence sales g ow h. While he i m size o economic p o i abili y
ha e a posi i e impac , he i m age educes sales g ow h. I can also be seen ha in 3 o he 5 models es ima ed
he e is a nega i e e ec o he lagged dependen a iable, sugges ing nega i e g ow h pe sis ence in he ish
p ocessing indus y. Mo e in de ail, he es ima ed coe icien s imply ha high le els o sales g ow h lead o lowe
g ow h a es he nex pe iod. This in e se speed o adjus men o g ow h o s eady s a e sugges ha mean
e e sion occu s in he g ow h dynamics o he sec o , ejec ing Gib a 's law.
4.3 |Robus ness analyses
To e alua e he obus ness o he indings, addi ional analyses we e pe o med. Fi s , we e‐ an he es ima es
de ailed in Table 5by using he GMM sys em es ima o ( wo‐s ep p ocedu e) o check i he esul s a e obus o
changes in model speci ica ion and es ima ion me hods. Second, we epea ed he es ima ions in Table 5by only
conside ing SMEs (i.e., hose wi h ewe han 250 employees), as well as di e en i m size cu o s o check o he
sho ‐ e m inancial managemen o SMEs only. Thi d, we conduc ed sepa a e coun y panels o explo e i he
WCM e ec s on sales g ow h hold ac oss sample coun ies.
Table 6shows he es ima ed coe icien s o he a iables e e ing o he i ms' NWC. The GMM sys em
es ima es yield simila esul s o hose ob ained wi h he i s di e ence GMM es ima o , al hough in en o ies show
a posi i e ela ionship wi h sales g ow h and he e ec o payable accoun s is no longe signi ican . Howe e , since
he Hansen Js a is ic p e en s us om accep ing he null hypo hesis o he absence o co ela ion be ween he
ins umen s and he e o e m, we conside he esul s p o ided in Table 5 o be mo e obus .
When he es ima es a e es ic ed o SMEs (i.e., i ms wi h less han 250 employees) he esul s hold.
Fu he mo e, he es ima es ha e been epea ed wi h di e en i m size cu o s (i.e., less han 50 and 10 employees),
and he esul s u n ou o be obus o changes in i m size cu o s.
8
In he es ima es by coun y, only hose e e ing o Poland p esen p oblems o possible misspeci ica ion. The
sign and signi icance o he coe icien s ob ained o he Spanish and No wegian companies coincide wi h hose o
he main models. In he es o he coun ies, al hough he signs o he e ec s es ima ed in Table 5a e main ained,
some o he a iables a e no longe signi ican . Mo e in de ail, only accoun s ecei able and nwc2_ a posi i ely
in luence he sales g ow h o I alian i ms. This posi i e in luence is also ound o accoun s payable and, as
expec ed, nwc2_ a in he case o F ench i ms. Finally, in Swedish companies, while accoun s ecei able main ains
hei posi i e e ec , in en o ies main ain hei nega i e in luence. In summa y, accoun s ecei able posi i ely
impac s sales g ow h in ou o he coun ies s udied, and accoun s payable in h ee, while in en o ies ha e a
nega i e e ec in h ee o he coun ies. I seems clea ha WCM policies ha e an impac on he sales g ow h o
companies in he sec o .
5|CONCLUSIONS
Sho ‐ e m inancial managemen is c i ical o company pe o mance, especially o SMEs, which ace g ea e
di icul ies han la ge companies in ob aining bank loans (Peel e al., 2000). These di icul ies a e e en mo e
p onounced in c edi ‐cons ained con ex s, such as hose expe ienced in he a e ma h o he inancial c isis o
2008 o he COVID‐19 pandemic, o he one ha can be an icipa ed wi h he wa in Uk aine, he supply c isis,
8
Fo i ms wi h less han 10 employees, he coe icien o in en o ies main ains he nega i e sign bu is no longe signi ican . Resul s
a e a ailable upon eques .
20
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inc easing in la ion o he ise in in e es a es by cen al banks in 2022. WCM is c ucial o o e coming he
inancial cons ain s he companies ace and o sus aining hei g ow h. Despi e his e idence, he li e a u e
on he opic emphasizes he in luence o WCM on i m p o i abili y, o e looking i s po en ial ole in i m
g ow h.
In his pape , we explo e he e ec o WCM on i m sales g ow h, ocusing on he ish p ocessing indus y o
six Eu opean coun ies in he pe iod 2013–2020. A e applying panel da a me hods, he esul s show clea ly ha
wo king capi al in es men and inancing policies impac on i m sales g ow h. Mo e in de ail, accoun s ecei able
and accoun s payable posi i ely in luence sales g ow h, while he in es men in in en o ies has a nega i e e ec .
These esul s sugges ha he ade c edi channel unc ions as a d i e o sales g ow h. Pa icula ly, he highe he
amoun o NWC inanced by supplie s, he highe he i m's g ow h. In e ms o wo king capi al inancing policies,
he esul s show ha sho ‐ e m bank deb does no ha e a signi ican impac on sales g ow h, bu long‐ e m bank
deb does, sugges ing he impo ance o inancing he NWC wi h posi i e wo king capi al o boos g ow h.
Mo eo e , hese indings ha e p o en o be obus o di e en es ima ions and ac oss di e en subsamples (e.g., by
coun y and i m size).
F om a scien i ic app oach, an impo an conclusion can be d awn. By adding payables o ecei ables and
in en o ies, his pape p oposes a de ini ion o NWC ha is an al e na i e o he con en ional one. In doing his,
payables a e assumed o be ela ed o i m pe o mance in he same di ec ion as ecei ables. Mo eo e , by
conside ing he sha e o NWC ha is inanced by nonspon aneous sho ‐ e m liabili ies, we a e also conside ing he
wo king capi al inancing policies in ou analysis. This pe spec i e o analyzing NWC con ibu es o a holis ic
pic u e o he wo king capi al inancing policy ha does no jus conside spon aneous inance bu also in eg a es
o he sho ‐ e m loans, which a e adi ionally igno ed by schola s.
Mo eo e , he e a e ele an conclusions om a p ac ical pe spec i e o bo h he Eu opean ish p ocessing
indus y and o he manu ac u ing sec o s in which SMEs a e p edominan . F om a wo king capi al inancing
pe spec i e, spon aneous inancing and wo king capi al (i.e., long‐ e m inancial esou ces emaining a e he
inancing o ixed asse s) posi i ely impac s on i m sales g ow h, discou aging he abuse o sho ‐ e m bank deb .
Taking he p e ious esul s oge he , we can conclude ha losing oppo uni ies o ea ly paymen discoun s is
compensa ed by lowe sho ‐ e m inancial cos s. Mo eo e , his ade‐o may be mo e impo an in igh inancial
ma ke s, in which sho ‐ e m deb can be e en mo e expensi e o jus no accessible because o in o ma ion
p oblems.
F om a wo king capi al in es men app oach, he esul s speak in a o o educing in en o ies and inc easing
accoun s ecei able. Thus, ecei ables can be a good mechanism o inc ease sales, a o ing a long‐ e m ela ionship
wi h consume s and allowing inancially s essed po en ial new cus ome s o pa icipa e in he ma ke , clea ly a ec ing
g ow h in a posi i e way. In con as , al hough he li e a u e usually conside s in en o ies managemen om a alue
chain pe spec i e, ocusing on b eakdowns in p oduc ion and educ ions in sale capaci y, highe s o age cos s need
esou ces ha could po en ially be in es ed in g ow h s a egies, hus delaying hem.
The mos impo an limi a ion o his s udy lies in he lack o da a o some a iables o in e es , which educed
he numbe o companies included in he mul i a ia e analyses o less han hal . In addi ion, companies o en se
a ge a ios and a ime ame o achie ing hem; his could be he case o sales g ow h. This aspec has no been
conside ed in he s udy and could open u u e lines o esea ch. Also, he p oposed heo e ical app oach and he
esul s a e p omising and should be alida ed by ex ending he analysis o o he sec o s and/o mac oeconomic
si ua ions. Thus, he ish p ocessing indus y shows some cha ac e is ics in i s p oduc ion chain ha would be
di e en o o he sec o s acing di e en NWC needs. Also, analyzing WCM unde di e en mac oeconomic
ci cums ances (e.g., igh inancial ma ke s in de eloping coun ies, o pe iods o inancial c isis) can be help ul o
unde s anding he g ow h possibili ies o i ms h ough NWC. Fo ins ance, i would be in e es ing o analyze wha
happened o he sales g ow h and WCM o ish p ocessing companies in he yea s immedia ely ollowing he 2008
inancial c isis. A pa icula ly challenging esea ch line would be o es whe he he nega i e e ec o in en o ies
pe sis s in a con ex domina ed by he h ea o supply chain dis up ion as expe ienced o e he las yea .
RODEIRO‐PAZOS ET AL.
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CONFLICT OF INTEREST STATEMENT
The au ho s decla e no con lic o in e es .
DATA AVAILABILITY STATEMENT
The da a we e ob ained om he Bu eau an Dijk ORBIS da abase, which con ains inancial in o ma ion on
companies in Eu opean coun ies.
ORCID
Da id Rodei o‐Pazos h ps://o cid.o g/0000-0002-5272-2676
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AUTHOR BIOGRAPHIES
Da id Rodei o‐Pazos joined Uni e sidade de San iago de Compos ela (Galicia/Spain) as an associa e p o esso in
2009. His esea ch in e es s a e academic en ep eneu ship, uni e si y spin‐o s, echnology ans e , and en u e
capi al. He is he au ho and co‐au ho o se e al books on en ep eneu ship. He has a ound 100 in e na ionally
e e eed pape s published in jou nal as Technology Analysis & S a egic Managemen ,Technology in Socie y,
Techno a ion,The Jou nal o Technology T ans e ,Business S a egy and he En i onmen o Se ice Business,included
in JCR. Recen ly, he pa icipa ed in Eu opean p ojec s “Ci izene gy,”“LACES,”and “FAN‐BEST.”
Sa a Fe nández‐López joined he Uni e sidade de San iago de Compos ela (Galicia/Spain) as an associa e
p o esso in 2006, a e 11 yea s o wo king as a lec u e and esea che . She is he Sec e a y o he Commi ee
o PhD P og am in Economics and Business since 2013. He esea ch in e es s a e in wo main a eas: household
inance and academic en ep eneu ship. She has a ound 120 in e na ionally e e eed pape s. Recen ly, she has
published in he jou nals Business Se ices,Eu opean Jou nal o Finance,Feminis Economis ,Techno a ion,
Technological Fo ecas ing and Social Change,Jou nal o Media Business S udies,o The Jou nal o Technology
T ans e , all o hem included in JCR.
Raúl Rios‐Rod íguez joined he Uni e sidade de San iago de Compos ela (Galicia/Spain) as a esea che in 2014
and as a lec u e p o esso in 2020. His esea ch in e es a e wo king capi al managemen , media economics,
cul u e and c ea i e indus ies, and communica ion o economic ideas and in o ma ion. He is he au ho and
co‐au ho o se e al wo ks on media economics and economic jou nalism, including in e na ionally e e eed
pape s published in jou nals such as Digi al Jou nalism,In e na ional Jou nal o Media Business,o Jou nalism
P ac ice.
Ad ián Dios‐Vicen e joined he Uni e sidade de San iago de Compos ela (Galicia/Spain) as an associa e
p o esso in 2022 a e 8 yea s o wo k as a lec u e and esea che . His esea ch in e es s a e ela ed o
inance and economic his o y. He has mul iple in e na ionally e e eed pape s, published in jou nals like
Technological Fo ecas ing & Social Change,Ma ine Policy,o Digi al Jou nalism, all o hem included in JCR.
Recen ly, he pa icipa ed in Eu opean p ojec s like “LACES”and “FAN‐BEST.”
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RODEIRO‐PAZOS ET AL.
15206297, 0, Downloaded om h ps://onlinelib a y.wiley.com/doi/10.1002/ag .21816 by Uni e sidade de San iago de Compos ela, Wiley Online Lib a y on [20/06/2023]. See he Te ms and Condi ions (h ps://onlinelib a y.wiley.com/ e ms-and-condi ions) on Wiley Online Lib a y o ules o use; OA a icles a e go e ned by he applicable C ea i e Commons License
How o ci e his a icle: Rodei o‐Pazos, D., Fe nández‐López, S., Rios‐Rod íguez, R., & Dios‐Vicen e, A.
(2023). Wo king capi al managemen and i m sales g ow h: E idence om ish p ocessing indus y.
Ag ibusiness,1–25. h ps://doi.o g/10.1002/ag .21816
RODEIRO‐PAZOS ET AL.
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15206297, 0, Downloaded om h ps://onlinelib a y.wiley.com/doi/10.1002/ag .21816 by Uni e sidade de San iago de Compos ela, Wiley Online Lib a y on [20/06/2023]. See he Te ms and Condi ions (h ps://onlinelib a y.wiley.com/ e ms-and-condi ions) on Wiley Online Lib a y o ules o use; OA a icles a e go e ned by he applicable C ea i e Commons License