Does compliance with Green Bond Principles bring any benefit to make G20’s ‘Green economy plan’ a reality?
- Authors: Nanayakkara, Kariyawasam , Colombage, Sisira
- Date: 2021
- Type: Text , Journal article
- Relation: Accounting and Finance Vol. 61, no. 3 (2021), p. 4257-4285
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- Description: We examine the impact and degree of compliance with Green Bond Principles (GBPs) on investor demand for Green Bonds (GBs) in G20 countries by employing cross-sectional regression to analyse data over the period 2007–2016. After controlling for common bond-specific and macroeconomic variables, we find a significant positive impact of higher compliance with principles on investor demand, as measured by bid-ask spread and yield spread. We show that GBs issued by government institutions are able to minimise the adverse effects of low compliance with GBPs and the investor demand for fixed-coupon GBs is higher than float-coupon GBs. © 2020 Accounting and Finance Association of Australia and New Zealand
Financial distress and COVID-19 : evidence from working individuals in India
- Authors: Goyal, Kirti , Kumar, Satish , Rao, Purnima , Colombage, Sisira , Sharma, Ankit
- Date: 2021
- Type: Text , Journal article
- Relation: Qualitative Research in Financial Markets Vol. 13, no. 4 (2021), p. 503-528
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- Description: Purpose: This study aims to explore the impact of the containment measures during COVID-19 on individuals’ finances, financial resilience during such distress and identifying the most financially vulnerable among them. Tracing such impact during the pandemic has been challenging due to a lack of representative data. This paper addresses this gap in the present study. Design/methodology/approach: A survey has been conducted using a structured questionnaire containing various items that portray the impact on income, spending, saving, investment, borrowing, insurance and retirement. The sample consists of 699 respondents and purposive and snowball sampling has been used for data collection. The results are presented and analyzed using infographics and frequency distributions. This study conducts an analysis of variance and Chi-square tests for significance. Findings: This paper finds a fall in income and limited ability to cope with the current economic conditions. The survey highlights inadequate savings and insurance, weak retirement planning, outstanding loans and under-diversified investments inhibiting financial resilience even among the higher-income group. Particularly, lower-income strata, women and not much educated are most financially vulnerable. Further, no substantial financial benefits have been received from the government and people rely on their usual income sources. Originality/value: To the best of the authors’ knowledge, this is the first study that measures the pandemic’s impact on personal finances, especially in connection with a developing economy like India. Policy interventions are critical to the millions for whom financial literacy is required now more than ever. © 2021, Emerald Publishing Limited.
Increasing the digital literacy skills of regional SMEs through high-speed broadband access
- Authors: Ollerenshaw, Alison , Corbett, Jennifer , Thompson, Helen
- Date: 2021
- Type: Text , Journal article
- Relation: Small Enterprise Research Vol. 28, no. 2 (May 2021), p. 115-133
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- Description: Universal challenges exist for small-to-medium enterprises (SMEs) in regional and rural areas to utilize digital technologies for entrepreneurial advancement. Barriers include insufficient understanding of digital technologies and a lack of skills necessary for digital adoption. In Australia, training programs were introduced to enhance the digital uptake for the business and community sectors. Research was conducted to examine the impact on participants’ perceived digital literacy awareness and knowledge of online services, and their skills development. Survey data was collected from program participants (n = 101) comprising SMEs and not-for-profit organizations (NFP), and from program mentors/facilitators (n = 9). The findings show that training supports knowledge transfer, learning and skills development, fostering confidence about digital technologies. It is recommended that ongoing training is delivered regionally so that SMEs and NFPs can exploit digital innovations within their businesses and organizations.
Pivoting authentic assessment to an accounting podcast during COVID-19
- Authors: Halabi, Abdel
- Date: 2021
- Type: Text , Journal article
- Relation: Accounting Research Journal Vol. 34, no. 2 (2021), p. 156-168
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- Description: Purpose: This paper aims to describe how the COVID-19 pivot to online teaching enabled a student-produced podcast assessment to be created and substituted for the final examination in an MBA accounting course. Design/methodology/approach: This paper provides instructors’ reflections and feedback from students on the usefulness of podcasts as an assessment tool in accounting education. Also included are the assignment instructions and a marking rubric which can be adapted as a sharing network. Findings: The pivot to the authentic podcast assessment proved to be a very positive outcome during COVID-19 for instructors and students. The students embraced and enjoyed the task, and importantly it was an efficient learning experience that connected theory to practice, while preserving authenticity. Originality/value: Podcasts have grown in popularity and have been widely used with students as receivers. The accounting education literature is however devoid of instances where podcasts have been used as an assessment tool. Although the assessment was changed because of the COVID-19 pandemic, it has ongoing applicability as a useful assignment in future semesters. © 2021, Emerald Publishing Limited.
Adoption of blockchain technology in the Australian grains trade : an assessment of potential economic effects
- Authors: Gunasekera, Don , Valenzuela, Ernesto
- Date: 2020
- Type: Text , Journal article
- Relation: Economic Papers Vol. 39, no. 2 (2020), p. 152-161
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- Description: Recent analysis of Blockchain use has highlighted considerable potential productivity gains arising from lower transaction costs between buyers and sellers of goods. This has been shown by recent examples of Blockchain use in the Australian grains sector. In this paper, we have further developed and quantified this concept of productivity gain by undertaking several illustrative scenarios using a general equilibrium model of the global economy. Our analysis indicates that an assumed modest growth (five per cent) in productivity due to Blockchain use in the grains sector could raise output by eight per cent over the medium term. If this is accompanied by Blockchain use in the Australian finance sector, grains output could reach ten per cent. This reflects the effect of reduction in transaction costs due to the use of Blockchain technology as a “distributed ledger technology” in grain trading. Further, it is anticipated that the wider effects of Blockchain-driven productivity enhancement of the Australian finance sector could contribute to approximately 2.5 per cent increase in GDP in the medium term, relative to what would otherwise be. © 2020 The Economic Society of Australia
Impact of credit quality on credit spread of green bonds : A global evidence
- Authors: Colombage, Sisira , Nanayakkara, Kariyawasam
- Date: 2020
- Type: Text , Journal article
- Relation: Review of Development Finance Vol. 10, no. 1 (2020), p. 31-42
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- Description: This study investigates the effect of credit quality on the credit spread of green bonds (GB). GB issues in 2016 and 2017 are considered for the study along with comparable conventional bonds (CB). The sample is categorised into two panels, investment-grade and non-investment-grade, to examine the effect of credit quality on the credit spread of GBs. Analysing a large sample of daily data, the study concludes that GBs are issued at a premium in the market only if the particular bond issue is an investment-grade one. This study uses hybrid method in panel regression analysis to reach the aforesaid conclusion. © 2020, AfricaGrowth Institute. All rights reserved.
Key variables and characteristics of loan loss given default : empirical evidence from 28 provinces in China
- Authors: Zhao, Zhichong , Colombage, Sisira , Chi, Guotai
- Date: 2020
- Type: Text , Journal article
- Relation: Emerging Markets Finance and Trade Vol. 56, no. 11 (2020), p. 2443-2460
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- Description: This article empirically investigates the impact of key variables and characteristics on loan loss given default (LGD) of small farmers using data from 28 provinces in China. The default feature of loans is not only a financial issue and a risk management issue but also an exploration of the loan customers’ default rule. In this study, the key variables were selected using an F-test to identify which ones are critical in credit risk management. Then, we use a t-test to obtain the significant characteristics with an impact on LGD. We found that the 30-35-year-old age group, those living in houses with shared ownership, households with two to four workers, and those whose ratio of annual net income to GDP per capita is between 10 and 20 tend to have higher LGD. These results inform bank lenders and policymakers of the most significant factors that influence loan loss default. ©, Copyright © Taylor & Francis Group, LLC.
Portfolio construction by using different risk models : a comparison among diverse economic scenarios
- Authors: Hunjra, Ahmed , Alawi, Suha , Colombage, Sisira , Sahito, Uroosa , Hanif, Mahnoor
- Date: 2020
- Type: Text , Journal article
- Relation: Risks Vol. 8, no. 4 (2020), p. 1-23
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- Description: We aim to construct portfolios by employing different risk models and compare their performance in order to understand their appropriateness for effective portfolio management for investors. Mean variance (MV), semi variance (SV), mean absolute deviation (MaD) and conditional value at risk (CVaR) are considered as risk measures. The price data were extracted from the Pakistan stock exchange, Bombay stock exchange and Dhaka stock exchange under diverse economic conditions such as crisis, recovery and growth. We take the average of GDP of the selected period of each country as a cut-off point to make three economic scenarios. We use 40 stocks from the Pakistan stock exchange, 92 stocks from the Bombay stock exchange and 30 stocks from the Dhaka stock exchange. We compute optimal weights using global minimum variance portfolio (GMVP) for all stocks to construct optimal portfolios and analyze the data by using MV, SV, MaD and CVaR models for each subperiod. We find that CVaR (95%) gives better results in each scenario for all three countries and performance of portfolios is inconsistent in different scenarios. © 2020 by the authors. Licensee MDPI, Basel, Switzerland.
Do investors in Green Bond market pay a premium? Global evidence
- Authors: Nanayakkara, Madurika , Colombage, Sisira
- Date: 2019
- Type: Text , Journal article
- Relation: Applied Economics Vol. 51, no. 40 (2019), p. 4425-4437
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- Description: We examine the pricing difference of Green Bonds (GB) and conventional bonds (CBs) in capital markets worldwide. Credit spread is used to observe whether investors would like to pay a premium for GBs over CBs. This study uses panel data regression with hybrid model to analyse daily observations over the period 2016 to 2017. We employ Option-Adjusted spread (OAS) to measure the credit spreads of bonds while controlling for bond specific, macroeconomic and global factors that influence the spread. With the hybrid model used in the panel data analysis, we were able to capture the fixed-effects of variables in a random effect model. We find that GBs are traded at a premium of 63 basis points (BPS), compared with a comparable corporate bond issue. We find that the green label provides issuers an incentive to raise funds through issuing GBs while providing investors an opportunity to diversify their investments returns. Our findings provide several implications to the major stakeholders driving the GB market to scale up the market to finance the required level of global green investment needs. We stress an urgent need to support the growth of the GB market to achieve sustainable development through mitigating climate change challenges. Abbreviation GB: Green Bond; CB: Conventional Bond; YS: Yield Spread; BPS: Basis Points; OAS: Option-Adjusted Spread; PCSE: Panels Corrected Standard Errors; CPI: Consumer Price Index; GBPs: Green Bond Principles; CBS: Climate Bond Standard.
Financial reporting quality, family ownership, and investment efficiency : An empirical investigation
- Authors: Shahzad, Faisal , Rehman, Ijaz , Colombage, Sisira , Nawaz, Faisal
- Date: 2019
- Type: Text , Journal article
- Relation: Managerial Finance Vol. 45, no. 4 (2019), p. 513-535
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- Description: Purpose: The purpose of this paper is to empirically investigate the impact of two monitoring mechanisms: family ownership (FO) and financial reporting quality (FRQ) on investment efficiency (IE) over the period of 2007–2014 for listed firms on the Pakistan Stock Exchange. Design/methodology/approach: The authors employ two-dimensional pooled OLS cluster at the firm and year level, two-stage least square regression and feasible generalized lease square regression regression methods. Findings: The findings suggest that higher FRQ and FO are associated with higher IE. Further, the authors report that higher FRQ and FO mitigate over- and under-investment. The impact of FRQ on IE is stronger (weaker) for family-controlled businesses. The results for these particular estimates are robust for alternative estimation techniques and measures of FRQ and FO. Originality/value: The study draws on both agency and behavioral agency theories and therefore contributes to the literature in the following ways. First, the authors examine a relationship between FRQ and IE. Second, the authors test the impact of FO on IE. Third, the authors test the moderating impact of FO on the relationship between FRQ and the IE of family and non-family firms in relatively less regulated emerging market.
Political competition and debt : Evidence from New Zealand local governments
- Authors: Chatterjee, Bikram , Bhattacharya, Sukanto , Taylor, Grantley , West, Brian
- Date: 2019
- Type: Text , Journal article
- Relation: Accounting Research Journal Vol. 32, no. 3 (2019), p. 344-361
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- Description: Purpose This paper aims to investigate whether the amount of local governments' debt can be predicted by the level of political competition. Design/methodology/approach The study uses the artificial neural network (ANN) to test whether ANN can "learn" from the observed data and make reliable out-of-sample predictions of the target variable value (i.e. a local government's debt level) for given values of the predictor variables. An ANN is a non-parametric prediction tool, that is, not susceptible to the common limitations of regression-based parametric forecasting models, e.g. multi-collinearity and latent non-linear relations. Findings The study finds that "political competition" is a useful predictor of a local government's debt level. Moreover, a positive relationship between political competition and debt level is indicated, i.e. increases in political competition typically leads to increases in a local government's level of debt. Originality/value The study contributes to public sector reporting literature by investigating whether public debt levels can be predicted on the basis of political competition while discounting factors such as "political ideology" and "fragmentation". The findings of the study are consistent with the expectations posited by public choice theory and have implications for public sector auditing, policy and reporting standards, particularly in terms of minimising potential political opportunism.
The surge of impact borrowing : The magnitude and determinants of green bond supply and its heterogeneity across markets
- Authors: Chiesa, Micol , Barua, Suborna
- Date: 2019
- Type: Text , Journal article
- Relation: Journal of Sustainable Finance and Investment Vol. 9, no. 2 (2019), p. 138-161
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- Description: Green bonds could play a key role in financing the investment needed to achieve the global climate and energy objectives and the UN Sustainable Development Goals. Using Bloomberg data of corporate green bond issuance from 2010 to 2017, we explore the factors affecting the size of borrowing. By employing a set of tri-dimensional elements (security characteristics, issuer characteristics, and market characteristics), we investigate the consistency of the effects across emerging and non-emerging markets. Findings suggest that, in general, issue size is positively related coupon rate, credit rating, collateral availability, and issuer’s sector and financial health. Moreover, issuances in emerging markets with a more international orientation and denominated in EURO, have a higher size. Arguably, these features make bonds more reliable, secured, and return-generating for investors, which facilitates higher issue size through greater investor demand. The paper calls for policies and incentives to encourage impact borrowing through increased green bond supply.
Credit default prediction using a support vector machine and a probabilistic neural network
- Authors: Abedin, Mohammad , Guotai, Chi , Colombage, Sisira , Fahmida-E-Moula
- Date: 2018
- Type: Text , Journal article
- Relation: Journal of Credit Risk Vol. 14, no. 2 (2018), p. 1-27
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- Description: The design of consistent classifiers to forecast credit-granting choices is critical for many financial decision-making practices. Although a number of artificial and statistical techniques have been developed to predict customer insolvency, how to provide an inclusive appraisal of prediction models and recommend adequate classifiers is still an imperative and understudied area in credit default prediction (CDP) modeling. Previous evidence demonstrates that the ranking of classifiers varies for different criteria with measures under different circumstances. In this study, we address this methodological flaw by proposing the simultaneous application of support vector machine and probabilistic neural network (PNN)-based CDP algorithms, together with frequently used high-performance models. We fill the gap by introducing a set of multidimensional evaluation measures combined with some novel metrics that are helpful in discovering unseen features of the model’s performance. For effectiveness and feasibility purposes, six real-world credit data sets have been applied. Our empirical study shows that the PNN model is more robust than its rivals, and traditional performance evaluations are more or less consistent with their original counterparts. With these contributions, therefore, our investigations offer several advantages to practitioners of financial risk management.
Does an aging population influence stock markets? Evidence from New Zealand
- Authors: Hettihewa, Samanthala , Saha, Shrabani , Zhang, Hanxiong
- Date: 2018
- Type: Text , Journal article
- Relation: Economic Modelling Vol. 75, no. (2018), p. 142-158
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- Description: The effect of the aging baby-boom-cohort on asset values is extensively studied. While that effect varies by country, there are likely to be commonalities. Thus, research on a relatively small advanced open economy like New Zealand can provide insight into the general effect. In this study monthly data from 1991 to 2017 is used to examine how aging population in New Zealand affects its stock market considering key demographic and non-demographic macroeconomic variables and a new focus on fast-and-slow-moving institutional change. The results suggest that the net effect of an aging population on stock markets is insignificant. However, real GDP and foreign portfolio investment (FPI) show a positive relationship with the stock market. The findings reveal that FPI can mitigate possible negative effects from aging in an open economy. Moreover, the policy implications of the study suggest that international-factor mobility, skilled-migration policies, and technology-based productivity growth can boost stock markets.
Emergency preparedness in fitness facilities : Bridging the gap between policy and practice
- Authors: Sekendiz, Betul , Norton, Kevin , Keyzer, Patrick , Dietrich, Joachim , Coyle, Ian , Gray, Shannon , Finch, Caroline
- Date: 2018
- Type: Text , Journal article
- Relation: International Journal of Business Continuity and Risk Management Vol. 8, no. 1 (2018), p. 71-85
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- Description: Fitness facilities are an important contributor to economies through preventative health policies of governments. Therefore, it is crucial that they are capable of ensuring the health and safety of their users during emergency situations under relevant work health and safety (WHS) legislation. This study aimed to analyse emergency response preparedness in fitness facilities in Australia and develop evidence-based strategic recommendations, using a mixed methods approach. An onsite observational audit tool and in-depth interviews were conducted at a sample of regional and metropolitan fitness facilities. The results showed that fitness facilities showed a lack of operational emergency response practices that requires an integrated approach to risk management by fitness facility operators. This gap between policy and practice has significant implications for all stakeholders involved in fitness service provision, including government agencies, academia and industry governing organisations.
On SPD method for solving canonical dual problem in post buckling of large deformed elastic beam
- Authors: Ali, Elaf , Gao, David
- Date: 2018
- Type: Text , Journal article
- Relation: Communications in Mathematical Sciences Vol. 16, no. 5 (2018), p. 1225-1240
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- Description: This paper presents a new methodology and algorithm for solving post buckling problems of a large deformed elastic beam. The total potential energy of this beam is a nonconvex functional, which can be used to model both pre- and post-buckling phenomena. By using a canonical dual finite element method, a new primal-dual semi-definite programming (PD-SDP) algorithm is presented, which can be used to obtain all possible post-buckled solutions. Applications are illustrated by several numerical examples with different boundary conditions. We find that the global minimum solution of the nonconvex potential leads to a stable configuration of the buckled beam, the local maximum solution leads to the unbuckled state, and both of these two solutions are numerically stable. However, the local minimum solution leads to an unstable buckled state, which is very sensitive to axial compressive forces, thickness of beam, numerical precision, and the size of finite elements. The method and algorithm proposed in this paper can be used for solving general nonconvex variational problems in engineering and sciences.
The role of regulatory focus and information in investment choice : Some evidence using visual cue to frame regulatory focus
- Authors: Ewe, Soo , Gul, Ferdinand , Lee, Christina , Yang, Chia
- Date: 2018
- Type: Text , Journal article
- Relation: Journal of Behavioural Finance Vol. 19, no. 1 (2018), p. 89-100
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- Description: This study examines the role of regulatory focus and additional information on risk preferences in investment choice using an experimental approach. The findings reveal that situational regulatory focus plays an important role in influencing investment choice. In particular, a congruent promotion-focused image and related message increases risk-taking behavior in terms of choice for stocks rather than fixed deposits, whereas the reverse is true for a congruent prevention-focused image and related message. However, this relationship depends on the amount of information available during the decision-making process, and regulatory focus has a stronger impact on investment choice under the condition without additional financial information.
Research on capital structure determinants : A review and future directions
- Authors: Kumar, Satish , Colombage, Sisira , Rao, Purnima
- Date: 2017
- Type: Text , Journal article , Review
- Relation: International Journal of Managerial Finance Vol. 13, no. 2 (2017), p. 106-132
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- Description: Purpose: The purpose of this paper is to study the status of studies on capital structure determinants in the past 40 years. This paper highlights the major gaps in the literature on determinants of capital structure and also aims to raise specific questions for future research. Design/methodology/approach: The prominence of research is assessed by studying the year of publication and region, level of economic development, firm size, data collection methods, data analysis techniques and theoretical models of capital structure from the selected papers. The review is based on 167 papers published from 1972 to 2013 in various peer-reviewed journals. The relationship of determinants of capital structure is analyzed with the help of meta-analysis. Findings: Major findings show an increase of interest in research on determinants of capital structure of the firms located in emerging markets. However, it is observed that these regions are still under-examined which provides more scope for research both empirical and survey-based studies. Majority of research studies are conducted on large-sized firms by using secondary data and regression-based models for the analysis, whereas studies on small-sized firms are very meager. As majority of the research papers are written only at the organizational level, the impact of leverage on various industries is yet to be examined. The review highlights the major determinants of capital structure and their relationship with leverage. It also reveals the dominance of pecking order theory in explaining capital structure of firms theoretically as well as statistically. Originality/value: The paper covers a considerable period of time (1972-2013). Among very few review papers on capital structure research, to the best of authors’ knowledge; this is the first review to identify what is missing in the literature on the determinants of capital structure while offering recommendations for future studies. It also synthesize the findings of empirical studies on determinants of capital structure statistically. © 2017, © Emerald Publishing Limited.
Working capital management and firm profitability : a Meta-analysis
- Authors: Singh, Harsh , Kumar, Satish , Colombage, Sisira
- Date: 2017
- Type: Text , Journal article
- Relation: Qualitative Research in Financial Markets Vol. 9, no. 1 (2017), p. 34-47
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- Description: Purpose: The purpose of this study is to quantitatively aggregate the findings of prior literature on the effect of working capital management (WCM) on corporate profitability using the meta-analysis technique developed by Hunter et al. (1982). Design/methodology/approach: A set of 46 research articles that directly studied the relationship between WCM, and profitability was analyzed for the purpose. In addition to overall meta-analysis, a detailed subgroup study was also conducted to test whether the differences in results are due to moderating effects related to different profitability proxies, economic development of a specific country and size of the firms under study. Findings: The findings of this meta-analysis confirm that WCM is negatively associated with profitability, which means an aggressive WCM policy leads to higher profitability. Overall, and in all the subgroup studies, the cash conversion cycle was found to be negatively associated with profitability. Originality/value: Unlike narrative literature review papers, this meta-analysis provides quantitatively aggregate evidence on the relationship of WCM and firms’ profitability. To the best of authors’ knowledge, no previous meta-analysis paper is published on the topic. © 2017, © Emerald Publishing Limited.
Working capital management practices in India : Survey evidence
- Authors: Baker, Kent , Kumar, Satish , Colombage, Sisira , Singh, Harsh
- Date: 2017
- Type: Text , Journal article
- Relation: Managerial Finance Vol. 43, no. 3 (2017), p. 331-353
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- Description: Purpose: The purpose of this paper is to investigate the working capital management (WCM) practices adopted by Indian firms listed on the National Stock Exchange (NSE). Design/methodology/approach: Using a questionnaire, the authors gather data from 110 financial managers and use various statistical techniques to test for statistical significance. Findings: The evidence shows that the majority (54.5 percent) of sample firms follow a moderate approach in financing their activities, which involves a trade-off between liquidity and profitability. Respondents tend to use an informal approach for WCM and consider receivables management as the most important component of WCM. In terms of WCM monitoring and financial measures, respondents mainly consider the cash conversion cycle and net working capital. Indian firms tend to use centralized cash management and rely heavily on material requirement planning (MRP) and enterprise resource planning (ERP) for proper inventory management. Research limitations/implications: Tests involving firm size, foreign sales, and average age do not differ significantly between the NSE-listed firms and the sample firms. This evidence lessens concerns of non-response bias and the ability to generalize the findings to Indian firms. Originality/value: By updating and extending previous research on WCM, this study fills a gap in the literature by providing insights into practices adopted by Indian firms in managing WCM and its components. © 2017, © Emerald Publishing Limited.