Inventory management, cost of capital and firm performance: evidence from manufacturing firms in Jordan
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Author(s)Ashraf Mohammad Salem AlrjoubLink to ORCID Index: https://orcid.org/0000-0001-8005-1219
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Muhannad Akram Ahmad
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DOIhttp://dx.doi.org/10.21511/imfi.14(3).2017.01
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Article InfoVolume 14 2017, Issue #3, pp. 4-14
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2067 Downloads
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Several studies have examined the relationship between inventory management and firm performance. However, most of these studies ignore the impact of inventory types on the relationship. Moreover, the relationship is influenced by some factors such as cost of capital which has not been considered. This study examines the moderating effect of cost of capital on the relationship between inventory types and firm performance. The data of 48 firms for the period 2010-2016 which formed 279 firm-year observations were used in this study. With the use of Pearson correlation and panel Generalized Method of Moments (GMM) estimation, the findings show that inventory management with consideration of its types influence firm performance in the long term. In addition, it is also found that cost of capital moderates the relationship between inventory management and firm performance. However, the interaction between cost of capital and inventory types has different implications. It is suggested that firms should consider cost of capital when making decision on inventory types and align their inventory control to fit in to the changes in their business environment.
- Keywords
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JEL Classification (Paper profile tab)G3, G31, G32
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References60
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Tables6
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Figures0
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- Table 1. List of firms and industries
- Table 2. Variables measurement
- Table 3. Summary of statistics
- Table 4. Correlation matrix
- Table 5. Inventory types and firm value
- Table 6. Inventory types, cost of capital and firm value
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Rawan Shubita , Moade Fawzi Shubita
doi: http://dx.doi.org/10.21511/imfi.16(2).2019.09
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Does capital structure affect firm value in Vietnam?
Tien Dat Dang , Thi Van Trang Do
doi: http://dx.doi.org/10.21511/imfi.18(1).2021.03
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Kartika Hendra Titisari ,
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doi: http://dx.doi.org/10.21511/imfi.16(4).2019.03
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