WORKING CAPITAL MANAGEMENT AND GLOBAL ECONOMIC POLICY UNCERTAINTY: EVIDENCE FROM TURKEY

Abstract

The aim of this study is to examine the unexplored association between working capital management and global economic policy uncertainty within the context of the Turkish manufacturing companies. Panel data regression analysis over a 16-year period, based on a sample of 187 listed manufacturing companies is employed in the study. The results suggest that companies increase their working capital investment due to an increase in global economic policy uncertainty. The study establishes that Turkish companies, which operate in an emerging market, prefer higher working capital to mitigate risks and ensure operational continuity. In addition, during periods of high global economic policy uncertainty, accounts receivable days, inventory turnover days, and accounts payable days increase. The findings show that global economic policy uncertainty induces conservative working capital management.