Impact of Cash Conversion Cycle (CCC) on Firm Performance: Evidence from OIC and non-OIC
Countries
Muhammad Imran Bhatti
Razali Haron
This research aims to examine the effect of CCC on firm performance across OIC and non-OIC nations. In this study, we employ a panel dataset of 54,725 firm-year observations from 22 OIC countries and 486,036 from 42 non-OIC countries from 2000 to 2020. The data has been collected from the Compustat database. The results were obtained through the use of regression analysis. We discover that, in OIC firms, CCC has a negative effect on firm performance, whereas, in non-OIC firms, CCC has a favorable effect on firm performance. By analyzing the effect of the cash conversion cycle on business performance among firms belonging to OIC and non-OIC countries, this study adds to the body of knowledge on working capital management. The context of OIC counties has never been examined before, which makes this study significant. Also, this study makes a comparison as to how CCC affects firm performance among firms belonging to OIC and non-OIC countries.
Keywords:Working capital management, Cash conversion cycle, Firm performance, Profitability, OIC countries, Emerging markets, Panel data analysis
