Business models and working capital management in automotive dealers

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Published: jul. 9, 2023
DOI: https://doi.org/10.54753/rve.v11i2.1851
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Nikola Petrovic
Pontificia Universidad Católica del Ecuador, Facultad de Ciencias Administrativas y Contables
José Cagigal-García
Pontificia Universidad Católica del Ecuador, Facultad de Ciencias Administrativas y Contables
Priscila Hermida
Pontificia Universidad Católica del Ecuador, Facultad de Ciencias Administrativas y Contables

Abstract

The business model implies the selection of several types of key activities that are reflected in the financial statements of the companies, affecting the indicators of working capital management. The objective of this study is to examine the relationship between different business models and working capital management in companies in the Ecuadorian automotive sector that cover around 50% of sales during the 2012-2021 period. For this purpose, we identify four business model within the sector. Using financial statements obtained from the webpage of Superintendency of companies, securities and insurance, we compared five measures of working capital management between them on the basis of univariate statistic and multivariable linear regressions. The results of show that the periods of inventories, accounts receivable, accounts payable, operating cycle and cash cycle are substantially longer for companies that sell automobiles in the secondary market compared to companies linked to local assembly plants. The study contributes to the literature by showing that the business model, even for companies with the same economic activity, is a differential determinant of efficiency indicators in working capital management.

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How to Cite
Petrovic, N., Cagigal-García, J., & Hermida, P. (2023). Business models and working capital management in automotive dealers. Revista Económica, 11(2), 70–84. https://doi.org/10.54753/rve.v11i2.1851
Issue
Vol. 11 No. 2 (2023): RVE vol 11 (Julio-Diciembre 2023)
Section
RESEARCH ARTICLES
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