An Analysis Of Competitive Effects Of Working Capital Under Dynamic Environment

Working capital largely determines the market competition effectiveness and operationaleiffciency，and the effective working capital management is cirtical to the development ofenterprise sirvival. Therefore, how to maintain a reasonable level of working capital andadjust the working capital reasonably, have become a growing concern of enterprises.Although working capital management is an important ifnancial resource decision，and howto support its competitive behavior to create value in the market is worthy of study, stillalmost no one involved in this research ifeld. In addition, the research of working capitalmanagement and performance also ignored the potential impact factors’ intermediary effect orintermediary regulation effect. Many scholars’ researches on the relationship betweenworking capital management and corporate proiftability are based on static environment, havenot yet tfirther research the inlfuence of working capital management efifciency and liquidityon product market competition performance in dynamic environment conditions. Therefore,rfom the competitive advantage perspective of relative industry competitors market sharegrowth, this paper reveals the effect of working capital turnover ability and liquidity oncompetition performance, and dele into the regulation effect of dynamic environmental on therelationship of working capital turnover ability, liquidity and corporate competitiveperformance, as well as the dynamic adjustment of working capital.The paper, which selectes A-share listed companies in manufacturing as the researchobject, analyzes the average effect of working capital on market competition performance indynamic environment ifrstly. And then because of the working capital turnover ability andliquidity changes at different intervals, so we tfirther analyze the interval effect of workingcapital on market competition performance. Finally, based on the points above, we analyzethe impact facotrs of the optimal working capital in dynamic environment, as well as workingcapital dynamically adjustment.The research results show that in dynamic environment, the liquid asset turnover ratio,accoiuits receivable turnover ratio and inventory turnover ratio was signiifcantly positivelyrelated to competition performance, while payables turnover ratio and cash conversion cyclewas signiifcantly negatively related to competitive performance. And liquidity andcompetitive performance was signiifcantly negatively correlated. Environmental Dynamismhas a signiifcant regulation effect on the relationship of working capital turnover ability,liquidity and competitive performance, and the higher the environment dynamic, the strongerits regulation effect on the relationship between working capital and competitive performance.In addition, the effect of working capital turnover ability and liquidity on competition performance will continue to change with the increase of working capital turnover ability andliquidity. When environmental dynamic is high，the strategic support role of accountsreceivable turnover ratio, inventory otnover ratio and liquid assets turnover ratio oncompetition performance continue increasing and then gradually weaken with thecontinuously improve of receivable turnover ratio, inventory otnover ratio and liquid assetotnover ratio. With the current ratio or quick ratio increase, it produces negative role oncompetition performance, and then gradually becomes a positive role. And compared to thelow environmental dynamics, the trend of this effect is more pronounced. On the basis of theanalysis of the average effect and interval effects, this paper analyzes the dynamic adjustmentof working capital, and the empirical results show that the adjustment degree of workingcapital is different when environment dynamic is different: when environmental dynamism ishigh, the degree of working capital adjustment is large.