Research On Working Capital Management Performances During Financial Crisis

Economic globalization, economic integration has become an important featureof international economic development, while promoting the development of theworld economy also planted many hidden dangers. In the second half of2007, theUnited States broke with mortgage loans subprime crisis characterized, then in a veryshort period of time evolved into a global economic crisis and deep into the economyentity, bringing great trauma to many countries’ economic development all over theworld. Among all the industries affected, textile and garment industry is quite an easytarget, for one of the many characteristics this industry owns is that it can be affectedby the macroeconomic situation easily and profoundly, which makes working capitalmanagement performance of the textile and garment industry is also vulnerable to themacroeconomic situation-financial crisis, specifically. China is the world’s largestexporter of textiles and clothing, textile and garment industry is a traditional pillarindustry of the national economy and an important livelihood industry, the obviousadvantages of international competitive industry, but also one of the main sectors ofexport earnings. During financial crisis, China’s enterprises in textile and garmentindustry have been facing more severe pressure to survive the increasingly complexcompetitive business environment that makes the uncertainty greatly enhanced withfinancial market turmoil and market demand changing rapidly, resulting in uncertaintyof working capital turnover and management dynamics. Under such occasion, theentire capital market requires companies to improve asset liquidity. Only particularcompanies whose financial flexibility is greatly increased in the bond market canconditionally get good financing to some extent. Thus to maintain their capital chainnot broken in such a crisis is not an easy stuff at all.So, in order to survive and thrive in the fierce market competition in terms ofworking capital management chain，companies must fully consider the characteristicsof their own reaction to the changing economic environment, especially the largereconomic crisis which affected intensely. Smaller companies should focus onelements of management or channel management in order to better cope with theimpact of the financial crisis. Since the international financial crisis China’s textileand garment industry, in addition to facing export orders decreased internationaldemand for its products industry fell sharply rising costs of factors of production ofcotton and other raw materials, labor and other labor and energy, coupled with theRMB exchange rate increases for small and medium scale enterprises financingproblems caused no small pressure, making the behavior of the textile and garment industry in working capital of enterprises had no small fluctuations.Based on the situation above, the financial crisis and the related problems ofworking capital management performance textile and garment industry is becominga hot topic of research in recent years. This paper mainly along the mainstream stagefunding operations research point of view, and from a perspective based on twoelements of the channel-based environment for the next financial crisis, the textileand garment industry, listed companies occupancy levels and working capitalmanagement to analyze performance, one spy financial crisis China’s textile andgarment industry, whether corporate occupancy levels and working capitalmanagement performance was significantly affected by the presence, whether theresults under different perspectives will vary; second is observed during thefinancial crisis, China’s textile and garment industry, the degree of export-orientedenterprises in different perspectives under the corporate working capital managementperformance impact. In this paper, occupancy levels and working capitalmanagement performance assessment as the main variables studied textile andgarment industry listed companies in these variables affected the situation in thefinancial crisis, which correlated with the financial crisis, and from themanagement perspective and based on the following elements based channelmanagement perspective of both classification and regression variables, and finallycompare the results of the regression analysis and observed similarities anddifferences between the two perspectives.Using an example of2007-2012A-sharedChina’s listed companies in the textile and garment industry, this article carries outcertain empirical tests of the correlation between factors such as the crisis itself aswell as export-oriented index and working capital management performancesthrough its occupation and turnovers. The results show that with the subprime crisisdeveloping as well as external environment deteriorating, working capital overmarketing channels suffers an adverse effect. Meanwhile the enterprises tend toimprove their working capital management performances by actually governing theirinternal management, especially the production channels.