Document Type : Research Paper


1 Associate Professor-ِ Department of Accounting- Faculty of Economics and Social Silences- Bu-Ali Sina University

2 Student of MSc, Bu-Ali Sina University


A company's effective investments in working capital are valuable; because it increases performance and reduces risk, which in turn reduces the cost of capital. In general, many researches have been conducted regarding working capital as well as adjustment towards the target and the effect of various variables on it, but the effect of the prevailing economic environment, including boom and recession, on the speed of adjustment has never been investigated. Therefore, the main goal of this research is to investigate the effect of economic boom and recession on the speed of adjustment of working capital for companies listed on the Tehran Stock Exchange. For this purpose, the data of 160 companies admitted to the Tehran Stock Exchange during the period of 2013 to 2021 have been used. This research is practical based on purpose. The type of research method is also based on the use of secondary and cross-sectional data. The research method of this research is quantitative and correlational. In order to analyze the data and test the research hypotheses, Using dynamic panel method with generalized system approach Moments Estimator (GMM). The research results showed that managers adjust the company's working capital ratio towards the target working capital. Other research findings showed that the rate of adjustment of working capital of companies during the boom period is greater than the recession of the financial sector of the economy as well as the real sector of the economy.


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