| Resumo: | Working capital management is one part of the integrated corporate financial strategy. Efficient working capital management is expected to have a positive effect on companies’ business. The study aims to investigate the main factors that impact working capital practices of some listed firms in China across different industries and their effect on the firms’ performance. The sample contains more than 2000 listed companies in China during the 2010 to 2014 period. Cash Conversion Cycle (CCC) is used as a measure of working capital policy, while Gross Operational Income (GOI) is used as a measure of profitability. The main results of the study suggest that Chinese listed firms’ working capital policy is different across industries and stable over the research period. Firms in China are prone to choose conservative working capital policy, which is shown to be positively associated to the firms’ profitability in this sample. Like most previous studies, a negative relation is found between the working capital indicator CCC and the profitability indicator GOI, which means that while the overall financing policy is conservative, reducing the CCC can still make the firms profitability increase. Unlike most of the research, the leverage is positively related to the working capital indicator CCC, suggesting that working capital reduction could be an alternative way of financing.
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