Influence of WCM Policies on Firm Liquidity: The Moderating Role of Pyramidal Structure

Abstract

The study explores how WCM (working capital management) decisions influence a firm’s liquidity, simultaneously analyzing the moderating role of pyramidal structure. The dataset has been drawn from 385 listed companies operating in non-financial sectors with the highest market capitalization listed on the Stock Exchanges of India, Malaysia, Singapore, and Pakistan. The time period covered is from 2015 to 2019. For empirical analysis, robust regression was used. It was found that firm liquidity was significantly affected by WCM policies. The pyramidal structure does affect the firm’s liquidity. Results also substantiate the moderating impact exhibited by the pyramidal structure on the relationship between WCM and liquidity. The work adds value to the current literature by substantiating the impact of pyramidal structure on the relationship between WCM and firm liquidity in Asian economies.