Are businesses Becoming More Efficient through Time? Testing the Change in Working Capital Requirements across Economic Sectors

UNCP Author/Contributor (non-UNCP co-authors, if there are any, appear on document)
Victor Bahhouth Ph.D., Associate Director of BIS studies and Professor of Finance (Creator)
Dr. Rebecca Gonzalez, Assistant Professor, School of Business (Creator)
Dr. William "Stewart" Thomas, Associate Dean, Associate Professor, School of Business (Creator)
The University of North Carolina at Pembroke (UNCP )
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Abstract: The study examines the efficiency of businesses through time. It tests the change in working capital requirements across economic sectors. The last two decades were earmarked with many changes. With no doubt technological innovations were among the most significant events that impacted almost every aspect of peoples’ life and businesses as well. In fact, technology became one of the critical components of survival and success for businesses. A core of business success is efficiency, which is the pledge of using fewer resources along with the commitment of improving quality; technology was the key for both. The study investigates if there had been a significant reduction in the working capital as a result of these changes in the last two decades. The research output of the study showed evidence that over the last twenty years there has been a significant decrease in the working capital requirements across most economic sectors. As a consequence, the efficiency of the market increases as more businesses are capable of entering the market because fewer funds are needed. In addition, consumers enjoy better quality products with cheaper prices as a result of competition.

Additional Information

Journal of Academic and Business Ethics, Volume 8
Language: English
Date: 2013
Working Capital, Technology, Current Assets, Resources, Business Efficiency, Quality Products, Inventory Control

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