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Working capital and firm performance: role of COVID-19 disruption

Pushpesh Pant (Operations Department, IMT Hyderabad, Hyderabad, India)
Pradeep Rathore (SRM University, Amaravati, India)
Krishna kumar Dadsena (IIM Ranchi, Kharagpur, India)
Bhaskar Shandilya (IIM Indore, Indore, India)

International Journal of Productivity and Performance Management

ISSN: 1741-0401

Article publication date: 30 May 2023

Issue publication date: 4 April 2024




This study examines the performance effect of working capital for a large sample of Indian manufacturing firms in light of supply chain disruption, i.e. the COVID-19 pandemic.


This study is based on secondary data collected from the Prowess database on Indian manufacturing firms listed on the Bombay Stock Exchange (BSE) 500. Panel data regression analyses are used to estimate all models. Moreover, this study has employed robust standard errors to consider for heteroscedasticity concerns.


The results challenge the current notion of working capital investment and reveal that higher working capital has a positive and significant impact on firm performance. Further, it highlights that Indian manufacturing firms suffered financially post-COVID-19 as they significantly lack the working capital to run day-to-day operations.


This research contributes to the scant literature by examining the association between working capital financing and firm performance in light of the COVID-19 pandemic, representing typical developing economies like India.



Pant, P., Rathore, P., Dadsena, K.k. and Shandilya, B. (2024), "Working capital and firm performance: role of COVID-19 disruption", International Journal of Productivity and Performance Management, Vol. 73 No. 4, pp. 1137-1166.



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