AN ANALYSIS OF DETERMINANTS OF WORKING CAPITAL REQUIREMENT BASED ON TURKISH CENTRAL BANK INDUSTRIAL BALANCE SHEETS: 1996-2013

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In this paper, we investigate existence of long-run relationships between the working capital requirement (lnISG), cash conversion cycle (NDS), leverage ratio (KLD), current ratio (CO) and return on assets (ROA). Sectoral balance sheets published by the Central Bank of Turkey for the 1996-2013 period have been used in this context. Applying Panel FMOLS and Panel DOLS cointegration analysis to the annually data for the 1996-2013 period, we find that the lnISG is negatively related to NDS and ROA, while lnISG is positively related to KLD and CO. According to the results of vector error correction model analysis, we find that there is a direction of causality from NDS, KLD, CO and ROA to lnISG in the long term and panel causality test results support the results of the panel cointegration test.

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Working Capital , Working Capital Management , Working Capital Requirement , Cointegration Analysis , Sectoral Balance Sheets.

Erciyes University Journal Of Economics an‎d Administrative Sciences

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Erciyes University Journal Of Economics an‎d Administrative Sciences