Abstract

Working capital management is one of the strategies to achieve the optimal liquidity for the company. This study tests the effect of accounting variables and characteristics of peer firms (companies in the same industry) on working capital management strategy. The statistic sample consists of listed companies in Tehran Stock Exchange during the years 2009 to 2015. In order to test hypothesis, hierarchical Bayes model, Gibbs sampling and Monte Carlo simulations - Markov chain is used. The results show that the sector (industry) type and peer firms' stock returns average have a significant relationship with working capital management.