This study analyses the determinants of working capital strengthening in industrial companies in Risaralda (Colombia) via nonlinear econometric panel models (probit and logit). It evaluates the influence of internal variables (liquidity, income and profitability) and external factors (market social interest) on these companies' ability to maintain liquidity and sustain financial growth.
This study is quantitative with an explanatory correlational scope and is based on data within a panel structure of financial indicators and total equity values for 50 industrial companies from 2020 to 2021. The data were obtained from the [Colombian Superintendence of Companies] (2024) via its official website. The total equity values were adjusted to real terms via the deflation process through the GDP implicit deflator. The methodological proposal is generally framed within the conceptual framework of the trade-off between profitability and risk. The identification strategy begins by following the approach developed by Cardona-Arenas (2025), who explains how to identify a probabilistic model that assumes a vector of explanatory variables. The method for estimating maximum likelihood with robust errors to heteroscedasticity for both probit panel models and logit panel models was selected, which is suitable in the context of a binary outcome variable.
The findings reveal that the current assets-to-liabilities ratio is the critical determinant, with a positive and significant effect on working capital, underscoring efficient liquidity management as a pillar of operational sustainability. Higher income and consolidated profitability reduce dependency on external financing, supporting the pecking order theory: companies prioritize internal resources in volatile contexts. Market social interest shows a negative association with working capital, suggesting that sectors with high public attention face strategic costs (e.g. aggressive marketing, innovation) that strain liquidity. This reflects indirect risks of market saturation or competitive pressures, where popularity correlates with financial complexities. The study concludes that companies must prioritize adaptive liquidity management, aligning reserves with market intelligence to navigate volatile environments.
The focus on industrial companies in Risaralda, Colombia, during a specific period (2020–2021) adds a distinct regional perspective which may not have been extensively covered in existing literature. The use of nonlinear models (probit and logit) to analyze the relationship between financial indicators and working capital efficiency may be unique in context compared to traditional linear approaches. The negative association between social market interest and working capital could present new insights, challenging conventional perceptions and suggesting avenues for further exploration.
