Intellectual Capital and Working Capital Management Efficiency : Evidence from the Indian Manufacturing Sector
Authors
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Mohini Mehta
Research Scholar (Corresponding Author), Haryana School of Business, Guru Jambheshwar University of Science & Technology, Hisar - 125 001, Haryana
https://orcid.org/0009-0008-0575-4844
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Shveta Singh
Professor, Haryana School of Business, Guru Jambheshwar University of Science & Technology, Hisar - 125 001, Haryana
https://orcid.org/0000-0003-1491-6135
DOI:
https://doi.org/10.17010/ijf/2026/v20i9/175746Keywords:
working capital management, cash conversion cycle, intellectual capital, manufacturing firms, panel analysis, India.JEL Classification Codes : C33, G30, G31, O34
Publishing Chronology: Paper Submission Date : October 25, 2025 ; Paper sent back for Revision : August 10, 2026 ; Paper Acceptance Date : August 25, 2026 ; Paper Published Online : September 15, 2026.
Abstract
Purpose : This research aimed to gather insights into how intellectual capital (IC) influenced the efficiency of working capital management (WCM) among BSE 500-listed manufacturing firms in India.
Design/Methodology/Approach : This research used a sample of 213 firms over the period 2016–2025, yielding 2,130 firm-year observations. WCM was measured via the cash conversion cycle and its constituents, while IC was measured through the modified value-added intellectual coefficient. Further, the Prais–Winsten Panel-Corrected Standard Errors technique with firm fixed effects was employed to test the proposed hypotheses.
Findings : The findings demonstrated that the IC coefficient positively impacted the working capital efficiency (WCE) of sampled firms, primarily through the receivable conversion period. All components of IC, namely capital employed, human capital, structural capital, and relational capital (RC), exhibited a significant influence only in some models and not consistently across all measures of working capital.
Practical Implications : This research offered valuable insights for policymakers and regulatory bodies in emerging nations to encourage firms to elevate their intellectual potential in order to achieve superior efficiency in WCM. As the research focused solely on one nation, it was suggested that future research could incorporate cross-country comparisons for a wider perspective.
Originality/Value : This research was one of the pioneering efforts to empirically investigate the interrelationship between IC and WCE among manufacturing firms in India.
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References
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