Table 5. The GMM regression coefficient...

Table 5.

The GMM regression coefficient analysis of the relationship between working capital and profitability (ROA/ROE) testing H1, H2 and H3

ROA	Overall NWCR H1	Positive NWCR H2	Negative NWCR H3	ROE	Overall NWCR H1	Positive NWCR H2	Negative NWCR H3
ROA (−1) _Y–1	0.514841 ^***	0.445911 ^***	0.530915 ^***	ROA (−1) _Y–1	0.373202 ^***	0.352652 ^***	0.327809 ^***
ROA (−2) _Y–2	0.232469 ^***	0.220483 ^***	0.268951 ^***	ROA (−2) _Y–2	0.15322 ^***	0.117372 ^***	0.467946 ^***
NWCR	0.02539 ^**	−0.02835 ^***	0.141723 ^**	NWCR	−0.06016 ^*	−0.07012 ^***	0.012695
NWCR²	−0.02131 ^***	–	–	NWCR²	−0.00258	–	–
Size	0.007563 ^**	0.005904 ^**	0.03308 ^**	SIZE	0.005886	0.005951	−0.01407
Growth	0.081859 ^***	0.067365 ^***	0.076458	GROWTH	0.112215 ^***	0.087922 ^**	0.209923 ^***
Leverage	−0.02573 ^**	−0.01942 ^*	−0.11865 ^**	LEVERAGE	0.010811	0.001004	0.028632
GDP	0.741988 ^***	0.582212 ^***	1.177099 ^***	GDP	0.22688	0.160313	0.053533
Obs.	577	496	81	Obs.	568	487	81

ROA	Overall NWCR H1	Positive NWCRH2	Negative NWCRH3	ROE	Overall NWCR H1	Positive NWCRH2	Negative NWCRH3
ROA (−1) _Y–1	0.514841^***	0.445911^***	0.530915^***	ROA (−1) _Y–1	0.373202^***	0.352652^***	0.327809^***
ROA (−2) _Y–2	0.232469^***	0.220483^***	0.268951^***	ROA (−2) _Y–2	0.15322^***	0.117372^***	0.467946^***
NWCR	0.02539^**	−0.02835^***	0.141723^**	NWCR	−0.06016^*	−0.07012^***	0.012695
NWCR²	−0.02131^***	–	–	NWCR²	−0.00258	–	–
Size	0.007563^**	0.005904^**	0.03308^**	SIZE	0.005886	0.005951	−0.01407
Growth	0.081859^***	0.067365^***	0.076458	GROWTH	0.112215^***	0.087922^**	0.209923^***
Leverage	−0.02573^**	−0.01942^*	−0.11865^**	LEVERAGE	0.010811	0.001004	0.028632
GDP	0.741988^***	0.582212^***	1.177099^***	GDP	0.22688	0.160313	0.053533
Obs.	577	496	81	Obs.	568	487	81

Notes:

ROA = return on assets = EBIT/total assets; ROE = return on equity = net income/total equity; NWCR = (trade receivables + inventory – trade payables)/sales; SIZE = logarithm of total assets; Growth = sales growth rate (Sales_n – Sales_n_–1)/Sales_n_–1; LEV = total liabilities/total assets; GDP = real GDP growth rate calculated as (GDP_n – GDP_n_–1)/GDP_n_–1; Obs. = number of observations.

Significant @ 10%;

Significant @ 5%; and

***

Significant @ 1%

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