WORKING CAPITAL MANAGEMENT AND FIRM VALUE: THE ROLE OF FIRM INNOVATIVENESS
There have been variations in working capital performance among firms and industries in various countries over the last decade. One of the causes of the variations is level of firm innovativeness. This study aims to examine the moderating role of firm innovativeness on the effect of working capital management on firm value between innovative and non-innovative firms in an emerging market. The study was carried out based on 400 listed firms in Bursa Malaysia for the period 2006-2015. By using a fixed regression estimation, the findings indicate that innovative firms have a better working capital performance than the non-innovative firms since they apply their innovative capabilities towards improving their working capital performance. This study suggests that firms need to align their innovative capabilities towards working capital management to improve firm value.
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