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Abnormal inventory and performance in manufacturing companies: evidence from the trade credit channel

Godfred Adjapong Afrifa, Ahmad Alshehabi, Ishmael Tingbani, Hussein Halabi Orcid Logo

Review of Quantitative Finance and Accounting, Volume: 56, Issue: 2, Pages: 581 - 617

Swansea University Author: Hussein Halabi Orcid Logo

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Abstract

This paper examines the value of abnormal inventory and the channels through which firms decrease abnormally high inventory or increase abnormally low inventory for a sample of 976 United Kingdom (UK) manufacturing firms over the period from 2006 to 2015. Using GMM regressions, the results show that...

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Published in: Review of Quantitative Finance and Accounting
ISSN: 0924-865X 1573-7179
Published: Springer Science and Business Media LLC 2021
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URI: https://cronfa.swan.ac.uk/Record/cronfa54447
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first_indexed 2020-06-11T13:09:03Z
last_indexed 2021-03-17T04:17:40Z
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spelling 2021-03-16T12:50:55.2943019 v2 54447 2020-06-11 Abnormal inventory and performance in manufacturing companies: evidence from the trade credit channel f7e6b4295ab6a82be92bdd4e99587e73 0000-0003-4951-9981 Hussein Halabi Hussein Halabi true false 2020-06-11 BAF This paper examines the value of abnormal inventory and the channels through which firms decrease abnormally high inventory or increase abnormally low inventory for a sample of 976 United Kingdom (UK) manufacturing firms over the period from 2006 to 2015. Using GMM regressions, the results show that (i) an optimal inventory policy exists; and (ii) firms that are able to converge at this optimal inventory level byeither decreasing abnormally high inventory or increasing abnormally low inventory to improve operational and stock performance. Importantly, the results show that trade receivables and trade payables are the channels through which firms achieve efficient inventory management. Journal Article Review of Quantitative Finance and Accounting 56 2 581 617 Springer Science and Business Media LLC 0924-865X 1573-7179 Abnormal inventory; Firm performance; Trade receivables; Trade payables; Firm risk 1 2 2021 2021-02-01 10.1007/s11156-020-00903-y COLLEGE NANME Accounting and Finance COLLEGE CODE BAF Swansea University University of Kent 2021-03-16T12:50:55.2943019 2020-06-11T12:29:04.3588482 Faculty of Humanities and Social Sciences School of Management - Accounting and Finance Godfred Adjapong Afrifa 1 Ahmad Alshehabi 2 Ishmael Tingbani 3 Hussein Halabi 0000-0003-4951-9981 4 54447__17620__6dfe662e95444664947332df31849375.pdf Abnormal inventory.54447.VOR.pdf 2020-07-01T16:17:30.7150935 Output 798463 application/pdf Version of Record true Distributed under the terms of a Creative Commons Attribution 4.0 (CC-BY) Licence. true eng https://creativecommons.org/licenses/by/4.0/
title Abnormal inventory and performance in manufacturing companies: evidence from the trade credit channel
spellingShingle Abnormal inventory and performance in manufacturing companies: evidence from the trade credit channel
Hussein Halabi
title_short Abnormal inventory and performance in manufacturing companies: evidence from the trade credit channel
title_full Abnormal inventory and performance in manufacturing companies: evidence from the trade credit channel
title_fullStr Abnormal inventory and performance in manufacturing companies: evidence from the trade credit channel
title_full_unstemmed Abnormal inventory and performance in manufacturing companies: evidence from the trade credit channel
title_sort Abnormal inventory and performance in manufacturing companies: evidence from the trade credit channel
author_id_str_mv f7e6b4295ab6a82be92bdd4e99587e73
author_id_fullname_str_mv f7e6b4295ab6a82be92bdd4e99587e73_***_Hussein Halabi
author Hussein Halabi
author2 Godfred Adjapong Afrifa
Ahmad Alshehabi
Ishmael Tingbani
Hussein Halabi
format Journal article
container_title Review of Quantitative Finance and Accounting
container_volume 56
container_issue 2
container_start_page 581
publishDate 2021
institution Swansea University
issn 0924-865X
1573-7179
doi_str_mv 10.1007/s11156-020-00903-y
publisher Springer Science and Business Media LLC
college_str Faculty of Humanities and Social Sciences
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hierarchy_top_title Faculty of Humanities and Social Sciences
hierarchy_parent_id facultyofhumanitiesandsocialsciences
hierarchy_parent_title Faculty of Humanities and Social Sciences
department_str School of Management - Accounting and Finance{{{_:::_}}}Faculty of Humanities and Social Sciences{{{_:::_}}}School of Management - Accounting and Finance
document_store_str 1
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description This paper examines the value of abnormal inventory and the channels through which firms decrease abnormally high inventory or increase abnormally low inventory for a sample of 976 United Kingdom (UK) manufacturing firms over the period from 2006 to 2015. Using GMM regressions, the results show that (i) an optimal inventory policy exists; and (ii) firms that are able to converge at this optimal inventory level byeither decreasing abnormally high inventory or increasing abnormally low inventory to improve operational and stock performance. Importantly, the results show that trade receivables and trade payables are the channels through which firms achieve efficient inventory management.
published_date 2021-02-01T04:03:53Z
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score 10.928009