EMPIRICAL NEXUS BETWEEN WORKING AND FINANCIAL WORKING CAPITAL MANAGEMENT AND ITS ANALOGY TO CAPITAL STRUCTURE

Abstract

Production-oriented firms need operational as well as financial working capital to sustain the business in a competitive environment. However, firms in underdeveloped countries face many issues in meeting the capital and revenue nature expenditure. Due to this issue these firms arrange capital from other sources like seed money. The financial working capital is linked with working capital components. Working capital is performing as an intermediary role between financial working capital and the capital structure of the firms. This study is proved that working capital is playing an intermediary role between financial working capital and capital structure of textile sector firms through empirical findings and as well as used GLS, Random Effect, Fixed Effect and GMM Techniques. Keywords: Financial Working Capital; Working Capital; Capital Structure; WACC; GMM; GLS; Random Effect; Fixed Effect; Textile Sector Firms; Pakistan Stock Exchange