Determinants of working capital management for noncertified and certified firms from the EFQM Excellence Model

AbstractThe study's main aim is to examine the important determinants that affect working capital (WRC) for non-quality-certified and quality-certified firms from the European Foundation for Quality Management (EFQM) Excellence Model and to explore the impacts of quality certificates on WRC. The study is conducted using the secondary data of 328 firms, including 21 quality-certified firms. The secondary data were retrieved from the Albertina database from 2017 to 2021. The two-step system generalized method of moments (GMM) estimation was employed to test the hypotheses. The empirical findings indicate that firm size and operating cash flow have a positive impact on WRC. On the other hand, financial leverage and profitability have a negative relationship with WRC. The quality certificates from the European Foundation have a positive impact on both types of WRC. The findings of this study will be beneficial to the firms' directors, managers, academics, and leaders to sustain the optimum level and forecast future WRC requirements.Keywords: Albertina databaseCzech firmsEFQM modelquality managementworking capital Disclosure statementNo potential conflict of interest was reported by the author(s).Data availability statementThe data of this study is available at Albertina database homepage, https://www.bisnode.cz/produkty/albertina/.Notes1 The data used in the current study are available at https://www.bisnode.cz/produkty/albertina/.Additional informationNotes on contributorsMuhammad YousafMuhammad Yousaf received his MSc. degree in economics from the University of Copenhagen, Denmark, and a PhD degree from Tomas Bata University in Zlin, Czech Republic. He has passed the course Applied Econometrics for Researchers from Copenhagen Business School (CBS), Denmark. His research interests are in quality management, financial economics, microeconomics, macroeconomics, and econometrics. He has published many research articles in various journals.