How do market imperfections affect working capital management?

This paper examines whether Working Capital Management (WCM) is sensitive to market imperfections such as asymmetric information, agency conflicts or financial distress. We find that firms have a target investment in working capital and that they take decisions in order to achieve this. In addition, the results appear to support the hypothesis that the working capital competes with investment in fixed assets for the funds of the firms when they have financial constraints. Finally, we also find that WCM depends on bargaining power and other financial factors such as the availability of internal finance, cost of financing and access to capital markets. Este artículo analiza si la gestión del capital circulante está afectada por las imperfecciones de mercado tales como la asimetría informativa, los conflictos de agencia o las dificultades financieras. Los resultados muestran que las empresas tienen un nivel de inversión en capital circulante objetivo y toman decisiones con el fin de alcanzarlo. Además, los resultados parecen apoyar la hipótesis de que el capital circulante compite con los activos fijos por los fondos de las empresas cuando éstas tienen restricciones financieras. Finalmente, la gestión del capital circulante depende del poder de negociación y otros factores financieros tales como la disponibilidad de financiación interna, el coste de financiación y el acceso a los mercados de capitales.ciclo de efectivo, gestión del capital circulante, imperfecciones de mercado, datos de panel net trade cycle, working capital management, market imperfections, panel data

ENDEUDAMIENTO A CORTO PLAZO EN LAS PYMES ESPAÑOLAS

This paper analyses the debt maturity structure of the small and middle sizedfirms using the trade-off reward risk associated to the use of short-term loans.Therefore, a sample of 11.533 small and middle Spanish manufacturing firms from year1997 through 2001 was used. The results of our study show that short-term loans aremore frequent in firms with greater financial strength and greater financial flexibility,major growth options and when the interest cost differential between short-long terms ismore pronounced. Also, the firm size seems to have an influence on the level of shorttermloans, it being higher in the smaller firms. Este trabajo analiza la estructura de vencimiento de la deuda en las PYMEs a partir del trade-off rentabilidad riesgo asociado al uso de recursos ajenos a corto plazo. Para ello, se ha utilizado una muestra de 11.533 pequeñas y medianas empresas manufactureras españolas durante el periodo 1997-2001. Los resultados obtenidos muestran que el endeudamiento a corto plazo es mayor en aquellas empresas que presentan una mayor solvencia y flexibilidad financiera, mayores oportunidades de crecimiento y cuando el diferencial de tipos de interés corto-largo es más acentuado. Así mismo, el tamaño de las sociedades también parece influir en los niveles de endeudamiento a corto plazo, siendo mayor en las empresas más pequeñas.Pymes, vencimiento de la deuda, solvencia financiera, flexibilidad financiera. SMEs, debt maturity, financial solvency, financial flexibility.

LA TESORERIA EN LA EMPRESA Y SUS DETERMINANTES

This paper analyzes the determinants of the corporate cash holding for a sampleof companies listed in the Spanish stock market. The results show that the firms have acorporate cash holding target level, and that this level is greater in companies withgreater cash flows. On the other hand, cash holding is negatively related to size, growthoptions, leverage, bank debt and liquid assets. Finally, the ownership structure alsoseems to affect the cash holdings. Este trabajo analiza los factores explicativos de la tesorería para una muestra de empresas cotizadas en el mercado continuo español. Los resultados obtenidos revelan que las empresas poseen un nivel de tesorería objetivo al que pretenden converger, y que dicho nivel es mayor en las sociedades con mayores flujos de caja. Por el contrario, el nivel de efectivo se ve reducido con el tamaño, con las oportunidades de crecimiento, con el nivel de endeudamiento, con el uso de deuda bancaria y con la liquidez de la empresa. Además, la estructura de propiedad también parece influir sobre los niveles de efectivo.Tesorería, liquidez, datos de panel. cash, liquidity, panel data

Determinants of working capital management

This paper analyzes the determinants of working capital management (WCM) for a sample of Spanish firms during the period 1997-2004. We find that firms have a target investment in working capital and that they take decisions in order to achieve this. The results appear to support the hypothesis that the working capital competes with investment in fixed assets for the funds of the firms when they have financial constraints. Finally, we also find that WCM depends on bargaining power and other financial factors such as the availability of internal finance, cost of financing and financial constraints.Research Agency of the Spanish Government ECO2008-06179/ECO

RELACIONES BANCARIAS Y SUS EFECTOS SOBRE LOS TÉRMINOS DE LA DEUDA EN LAS PYMES

This paper analyses the effect of bank relationships on the interest rate and personaland real guarantees borne by a sample of small and medium-sized enterprises in theirindebtedness. The results of this paper indicate that the SMEs that work with fewer financialintermediaries obtain debt at a lower cost. This reflects that the advantages linked to debtconcentration are greater than the disadvantages. Additionally, financial institutions show aclear tendency towards raising the interest rate and the use of personal guarantees as therelationship becomes longer. Finally, the companies that have a more intense relationship oftrust with their lender obtain loans at a lower cost, but supplying more real guarantees Este trabajo analiza el efecto de las relaciones bancarias sobre el coste y las garantías reales y personales que las pequeñas y medianas empresas soportan en su endeudamiento con entidades de crédito. Los resultados de este estudio indican que las PYMEs que trabajan con menos intermediarios financieros obtienen deuda a un tipo de interés inferior. Esto refleja que las ventajas asociadas a la concentración del endeudamiento son superiores a las desventajas. Además, se aprecia una clara tendencia de las entidades de crédito a elevar el coste y el uso de garantías personales a medida que avanza la relación. Por último, las empresas que mantienen una relación de confianza más intensa con su prestamista obtienen créditos con un menor coste, pero aportando más garantías reales.relaciones bancarias, tipo de interés, garantía personal, garantía real, intermediario financiero, información asimétrica, PYME. bank relationships, interest rate, personal guarantees, real guarantees, financial institution, asymmetric information, SME.

Acquisition of financial management skills in the new framework for adaptation to the EHEA. Póster

One of the main consequences of adapting to the European Higher Education Area (EHEA) is the replacement of traditional teaching methods, based almost entirely on the lecture, with new methodologies where active participation on the part of the students is a key part of the teaching-learning process. It is, therefore, of interest to offer empirical evidence showing that the new teaching methods employed really do serve to improve the results of the students in the acquisition of skills. The aim of this paper is, therefore, to assess the results obtained from bringing in the new EHEA, compared to those obtained under the traditional teaching system. With the above aim in mind, we analysed the results from the two existing groups of students studying Financial Management I of the Degree in Business Administration and Management (academic year 2009-10) at the Faculty of Economics and Business of the University of Murcia. The first group comprised students who had followed the course under the traditional lecture-based teaching system. The second group was made up of students taking part in the innovation project being run by the Faculty of Economics and Business. EHEA teaching methodologies and materials have been employed in the second group. Besides the lecture and the practical class, the following teaching methodologies have been employed: problem-based learning, workshops on problems, group tutorials, group work and participative models. The first group was assessed purely on the basis of an end of semester examination, while in the case of the second group, the final examination counted for 60% of the mark, 30% corresponded to individual work and group practical work and 10% to participation in class and responses to questions posed by the teacher. It should be highlighted that the final examination was the same for both groups, so the comparison o results is free of bias in that aspect. The results show that higher percentage of passes in the group with innovative teaching – 93.75% versus 48.19% in the lecture-based class group. The average grade was also higher – 7.08 over 10 versus 4.52 over 10. These differences are significant (t statistic 6.382 for the means difference test). In order to rule out the possibility of these better results being due to the assessment awarded for the non similar parts of the examination, a comparison was also made of the marks obtained exclusively in the examination common to both groups. While the number of passes (75%) and the average mark of the group in the innovative method (6 over 10) fall, the results remain significantly better than those of the lecture-based classes group (t statistic for the difference in mean marks was 2.485).Campus Mare Nostrum, Universidad Politécnica de Cartagena, Universidad de Murcia, Región de Murci

Financing of working capital requirement, financial flexibility and SME performance

This paper investigates the relation between the financing strategies of working capital requirement and firm performance for the period 1997 to 2012. Using the two-step generalized method of moments estimator, we find that a suitable financing strategy can help firms improve their performance. Moreover, the results indicate that the working capital requirement financing-performance relation changes during a financial crisis. Finally, we also find that this relation depends on a firm’s financial flexibility. The findings are of interest for managers and researchers and show that managers should not only be concerned about investing in working capital requirement but also consider how this investment is to be financed. To the best of our knowledge, this is the first paper to analyse how the financing strategy selected by firms to finance their working capital requirement affects their performance

Influence of the Pump Control System in the Selection of the Number of Fixed Speed and Variable Speed Drive Pumps in Water Pumping Stations

[EN] Proper design of a pumping system requires the use of a pump curve and set-point curve system. Both have to be as close as possible to optimize energy use. This is achieved by control systems in which the type of control (flow or pressure) and the combination between fixed speed drive (FSD) pumps and variable speed drive (VSD) pumps are involved. The objective of this work is to determine the optimal number of FSD and VSD pumps for each flow rate range in order to discuss the classic design of pumping stations and their control systems. For this, a methodology is applied that defines the parametric form of the pump curve, efficiency curve, and set-point curve in relation to the most efficient point. In this way, dimensionless expressions are obtained and the influence of the set-point parameters on the design of the control system can be analyzed. Additionally, the method includes an expression that estimates the performance of the frequency inverter, which is based on the load and pump speed rotation. The application of the methodology to different case studies allows us to question many classic procedures for pumping stations. In summary, it can be concluded that the appropriate number of variable speed pumps for each control system cannot be established in advance but requires an in-depth study of different available options.Briceño, C.; Iglesias Rey, PL.; Martínez-Solano, FJ. (2019). Influence of the Pump Control System in the Selection of the Number of Fixed Speed and Variable Speed Drive Pumps in Water Pumping Stations. Proceedings. 48(1):1-11. https://doi.org/10.3390/ECWS-4-06445S11148

Multi-Objective Optimization of Drainage Networks for Flood Control in Urban Area Due to Climate Change

[EN] The Fifth Assessment Report (AR5) of the Intergovernmental Panel on Climate Change (IPCC) of the United Nations mentions that extreme rainfalls might increase their intensity and frequency in most mid-latitude locations and tropical regions by the end of this century, as a consequence of the rise of the average global surface temperature. Human action has given way to global warming which manifests with an increase in extreme rainfall. If these climatic conditions are added to the waterproofing that cities have been experiencing as a result of urban development, a scenario of growing concern for the managers of drainage systems is generated. The objective of drainage networks is preventing the accumulation of rainwater on the surface. Under the new conditions of climate change, these need to be modified and adapted to provide cities with the security they demand. The following article describes a method for flood control by using a rehabilitation model that connects the Storm Water Management Model (SWMM) 5 model with a genetic algorithm to find the best solutions to the flood problem. The final analysis is performed using the Pareto efficiency criteria. The innovation of this method is the inclusion of a local head loss in the drainage network, allowing the upstream flow to be retained by decreasing the downstream concentration time. These elements called hydraulic controls improve system performance and are installed in the initial part of some pipes coming out of storm tanks. As a case study, the developed method has been applied in a section of the drainage network of the city of Bogotá.Bayas-Jiménez, L.; Iglesias Rey, PL.; Martínez-Solano, FJ. (2019). Multi-Objective Optimization of Drainage Networks for Flood Control in Urban Area Due to Climate Change. Proceedings. 48(1):1-9. https://doi.org/10.3390/ECWS-4-06451S1948

Simultaneous Calibration of Leakages, Demands and Losses from Measurements. Application to the Guayaquil Network (Ecuador)

[EN] Hydraulic models of water supply networks are widely used by utility companies to assist in decision making. The reliability of the model strongly depends on the quality of its calibration, that is, the correspondence between the measure variables and the calculated ones. When dealing the model is static, the calibration is easy to reach for average values of the variables. On the contrary, dynamic models need to spatially allocate demands and distribute them among the nodes of the network, which complicate the problem. The paper proposes a methodology for preliminary calibration of hydraulic models based on advanced calibration techniques. This methodology is applied to models with both pressure-dependent and independent demands. Pressure-dependent demands are related to leakages and are spatially distributed according to the length of the pipes and volumetric efficiency of the district metering area (DMA) being considered. In order to model leakages, the Germanopoulos model has been chosen. Thus, leakage flow is a function of the length of the pipes and the pressure along them. The equation to quantify the volume of leakage is a modification of the orifice equation. From this leakage model, a calibration process is proposed. It consists in three steps. First, a global leakage coefficient is calculated in order to satisfy daily mass balance of produced unaccounted and consumed water. In the second step, a time demand pattern is calculated. After these two steps a preliminary model is obtained. Finally, a conventional calibration process is done using discrepancies between pressure measurements and model result to adjust both roughness and minor losses coefficients. In order to validate this calibration methodology, a case study was used in Guayaquil (Ecuador) in which three DMA were studied. The results showed that the method converges very quickly and is effective regardless the volumetric efficiency of the network.S39740418