Broadening the perspective on the relationship between working capital and corporate performance: an empirical supply chain network analysis

This paper analyses how the presence of financial constraint along supply chain networks influences a company’s performance-maximizing level of net working capital (NWC). Based on the financial data of 1,986 industrial firms and their largest suppliers and customers, this paper provides empirical evidence that demonstrates the extent of the impact of financial constraints on corporate performance. One main conclusion made is that the impact strongly depends on the position of the respective actor in the supply chain (supplier, focal firm, and customer).