Arbeidskapitalstyring og aksjonærverdi : en empirisk analyse av sammenhengen mellom arbeidskapitalstyring og aksjonærverdi i Norden

Abstract

In this thesis, we provide an empirical study of the relationship between corporate working capital management and shareholder wealth in the Nordic countries. The focus on working capital management has increased because of the economic crisis that engulfed most of the world in 2008, as firms have turned to their own balance sheets in search for liquidity. The methodology used in this thesis relies on the model proposed by Faulkender and Wang (2006) and later expanded by Kieschnick et al. (2011) to assess the effect of working capital management on shareholder wealth. By examining 278 listed companies in Norway, Sweden, Denmark and Finland from 2008 through 2013, we find that an additional Norwegian krone invested in net operating working capital is valued at less than one krone by investors. Further, we find that an additional Norwegian krone invested in cash holdings is valued at more than one krone by investors. Second, we find that the importance of working capital management differs across industries, although our sample prevent us from analyzing all industries. Third, we find that the valuation of an additional Norwegian krone invested in net operating working capital is influenced by a firm’s bankruptcy risk and financial constraints. Fourth, we find that an additional Norwegian krone invested in account receivables is valued more than an additional Norwegian krone invested in inventory. Our results are largely consistent with previous research in this area, although research is scarce. Altogether, the results in this thesis points out the importance of working capital management on shareholder wealth.