Economic Cycle,Market Bargaining Power And Dynamic Adjustment Of Working Capital

Working capital management is the management of short-term capital by enterprises,which is divided into broad working capital and narrow working capital.Generally speaking,working capital,also known as total working capital,refers to the capital investment of enterprises in current assets such as accounts receivable and inventory.In the narrow sense,working capital is the difference between current assets such as money funds,accounts receivable and current liabilities such as short-term loans borrowed by enterprises in order to maintain normal operation.It can be used to measure the short-term solvency of enterprises.Under the background of global economic integration,rising inflation rate and constant challenges to economic development,the status and role of working capital management has become increasingly prominent.Traditional research on working capital management has lagged behind the ever-changing practice of working capital management.In recent years,many scholars at home and abroad have devoted themselves to the study of working capital.Operating capital management of an enterprise is an inevitable place for an enterprise to exert its advantages in capital management in the face of complex and changeable market competition environment.Especially in the period of economic downturn,the enterprise must attach great importance to the problems existing in its operating capital management.At present,there are common problems in the management of working capital of enterprises in our country:the utilization rate of cash of most enterprises is low,the main reason is that the management is not in place,and it is difficult to determine the optimal cash holdings.As a result,good investment opportunities will be missed or preventive motivation can not be met;accounts receivable has a long account age and a large amount,resulting in weak cash flow in the entire supply chain,lack of market vitality,business net cash flow continues to be negative;excessive inventory.Especially in industrial manufacturing and other industries,the problem is the most prominent.In industrial manufacturing and other industries,there will be overcapacity.Inventory occupies too much capital,resulting in capital mainly relying on inventory and other assets which are not easy to realize.The capital cost is higher and turnover is more difficult;the ratio of current assets to liabilities is higher,and the allocation ratio of assets is unreasonable.Therefore,in the face of the root problems in the management of working capital,it is very important for the operation and development of enterprises to grasp and adjust them timely and accurately.With the fast development of China's economy and the improvement of its international position,Chinese enterprises are facing more and more complex market environment both in the domestic market and in the international market.It is very important for enterprises to achieve the major position in the market and the right to speak in the intense market competition.Therefore,we need to study how the market bargaining power of enterprises affects the management of working capital under the influence of macroeconomic elements and economic cycles.According to the special institutional background of our country,we can see the big differences between state-owned enterprises and private enterprises in the characteristics of enterprise management,operation mode and the nature of actual controllers.On this basis,we conduct group research.In order to solve the problems encountered in the long-term healthy development of Chinese enterprises,improve the quality of operation and competitiveness of enterprises,and improve the capital market of our country,we should find out the suggestions and measures for different enterprises to solve their own problems.This paper constructs a fixed-effect model to study the impact of market bargaining power on the dynamic adjustment of working capital and its speed under different economic cycles by using the system GMM method for the financial data of A-share Manufacturing Listed Companies in China from 2000 to 2016.It draws the conclusion that the faster the market bargaining power is,the faster the adjustment of working capital is;in the downturn period,the market bargaining power is.The stronger the capability,the more active the adjustment of working capital,and the faster the adjustment of working capital of state-owned enterprises is than that of private enterprises.The significance of the study is to construct the logical path of the influence of market bargaining power on the dynamic adjustment of working capital from the perspective of economic cycle,further discuss the differences of property rights,expand the empirical boundaries of the dynamic adjustment theory of working capital,and confirm the synergistic effect between different factors.