Determinants of working capital management for noncertified and certified firms from the EFQM Excellence Model

Abstract The study’s main aim is to examine the important determinants that affect working capital (WRC) for non-quality-certified and quality-certified firms from the European Foundation for Quality Management (EFQM) Excellence Model and to explore the impacts of quality certificates on WRC. The study is conducted using the secondary data of 328 firms, including 21 quality-certified firms. The secondary data were retrieved from the Albertina database from 2017 to 2021. The two-step system generalized method of moments (GMM) estimation was employed to test the hypotheses. The empirical findings indicate that firm size and operating cash flow have a positive impact on WRC. On the other hand, financial leverage and profitability have a negative relationship with WRC. The quality certificates from the European Foundation have a positive impact on both types of WRC. The findings of this study will be beneficial to the firms’ directors, managers, academics, and leaders to sustain the optimum level and forecast future WRC requirements.