Does Efficient Working Capital Management Accelerate the Speed of Adjustment in Working Capital? : Evidence from India

Using 719 Indian listed firms for 11 years from 2012 to 2022, this study provides evidence that the speed of adjustment (SOA) is higher (lower) for the sample firms with below (above) median net trade cycle (NTC). Our findings are robust to the alternative measure of WCM efficiency in the Indian context. We further show that the economic crisis proxied by COVID-19 has further reduced the SOA in WC of firms with above median NTC. However, the influence of economic crisis is not observed on the SOA in WC for firms with below median NTC