Working capital management during the global financial crisis: the Australian experience

Vikash Ramiah (School of Economics, Finance and Marketing, RMIT University, Melbourne, Australia)
Yilang Zhao (School of Economics, Finance and Marketing, RMIT University, Melbourne, Australia)
Imad Moosa (School of Economics, Finance and Marketing, RMIT University, Melbourne, Australia)

Qualitative Research in Financial Markets

ISSN: 1755-4179

Publication date: 10 November 2014

Abstract

Purpose

This paper aims to document the measures taken by Australian corporate treasurers in the areas of cash, inventory, accounts receivable, accounts payable and risk management to survive the global financial crisis (GFC).

Design/methodology/approach

Using qualitative techniques like interviews and a survey questionnaire, this paper summarises the various measures adopted by working capital managers.

Findings

The results show that more than half of the participants in the survey altered their working capital management practices during the crisis. Capital expenditure was curtailed, as they aimed at preserving their cash levels while reducing inventory levels. Credit worthiness of institutions became more important, and there was a general decline in credit availability. The results also show that Australian working capital managers exhibit behavioural biases, particularly overconfidence.

Originality/value

It is the first paper that uses open-ended questions to capture the effects of the GFC on working capital management in Australia.

Keywords

Acknowledgements

The authors are grateful to an anonymous referee for useful comments. The authors would also like to thank late Professor Tony Naughton for his support on this project.

Citation

Ramiah, V., Zhao, Y. and Moosa, I. (2014), "Working capital management during the global financial crisis: the Australian experience", Qualitative Research in Financial Markets, Vol. 6 No. 3, pp. 332-351. https://doi.org/10.1108/QRFM-09-2012-0026

Publisher

:

Emerald Group Publishing Limited

Copyright © 2014, Emerald Group Publishing Limited

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