Working Capital Management of Small and Medium-Sized Enterprises (SMEs) in Accra, Ghana: The Perspective of Owner Managers’ Behavioral Biases

This thesis aims to investigate the working capital management of Small and Medium-Sized Enterprises (SMEs) in Accra, Ghana from the perspective of owner managers’ behavioral biases. Knowledge about behavioral biases in working capital management has lagged despite the fact that most Small and Mediu...

Full description

Saved in:

Bibliographic Details
Main Author:	JEFF, LAMPTEY
Format:	Thesis
Language:	English English English
Published:	2023
Subjects:	HG Finance
Online Access:	http://ir.unimas.my/id/eprint/42072/4/DECLARATION%20AND%20SUPERVISOR%20APPROVAL_Jeff%20Lamptey.pdf http://ir.unimas.my/id/eprint/42072/6/Thesis%20PhD_Jeff%20Lamptey_24pages.pdf http://ir.unimas.my/id/eprint/42072/11/Thesis%20PhD_Jeff%20Lamptey.fulltext.pdf
Tags:	Add Tag No Tags, Be the first to tag this record!

id	my-unimas-ir.42072
record_format	uketd_dc
spelling	my-unimas-ir.420722024-07-15T08:13:40Z Working Capital Management of Small and Medium-Sized Enterprises (SMEs) in Accra, Ghana: The Perspective of Owner Managers’ Behavioral Biases 2023-06-26 JEFF, LAMPTEY HG Finance This thesis aims to investigate the working capital management of Small and Medium-Sized Enterprises (SMEs) in Accra, Ghana from the perspective of owner managers’ behavioral biases. Knowledge about behavioral biases in working capital management has lagged despite the fact that most Small and Medium Enterprises (SMEs) managers who employed a subjective approach to working capital management may expose themselves to overconfidence, Loss aversion, anchoring, and adjustment biases. To address this concern, this thesis employed qualitative designs and obtained textual data through telephone interviews with thirty-five (35) SME owner-managers to obtain their perspective on these biases by exploring the basic assumptions of overconfidence theories (Better- than average effect; the illusion of control and excessive optimism and over the precision of knowledge), Loss aversion theory and anchoring and adjustment theory. Based on the thematic data analysis, this study finds support that SMEs owner-managers exhibit overconfidence, loss aversion, anchoring, and adjustment, influencing working capital management. Specifically, the results suggest that overconfident SME owner-managers believe that they possess superior financial ability, perfect industry knowledge and are optimistic about business success and wish to overinvest in working capital inventory if they have enough internal funds. Furthermore, the finding suggested that loss-averse SME owner-managers exhibited the fear of loss and costs disposition effects to the extent that highly loss-averse SMEs owner managers tend to underinvest in working capital inventory while low loss-averse SMEs managers tend to overinvest in working capital inventory. In terms of anchoring and adjustment bias, the results show that managers rely heavily on mental shortcuts or heuristics: self-generated and provided anchors in working capital management. More specifically, SMEowner-managers rely on customer trust, initial offers (price list,quotation), and market trends and demand (past and current sales). The premium managers attached to these anchors led them to either overinvest or underinvest in working capital. Specifically, low anchor (low initial offers and high growth market) tends to induce managers to increase working capital investment inventories while high anchor (high initial offer and declined market growth) discouraged SMEs managers to curtail working capital investment. Meanwhile, managers tend to grant more accounts receivable to highly trusted customers because of longstanding business relationships, taken as low default risk, than customers with a short-term business relationship. The study findings contribute by adding to the limited empirical evidence that exists on the influence of SMEs owner-manager overconfidence and inventory management, cash management, financing; SMEs owner managers’ loss aversion and inventory management and anchoring and adjustment bias of SMEs owner-managers, and inventory management, accounts receivable. By implication, the findings of this study support the theories of overconfidence, loss aversion theory, anchoring, and adjustment and add to broaden the scope of working management practices in SMEs. Finally, the study concludes that SMEs managers’ behavioral biases matter in working capital management. UNIMAS 2023-06 Thesis http://ir.unimas.my/id/eprint/42072/ http://ir.unimas.my/id/eprint/42072/4/DECLARATION%20AND%20SUPERVISOR%20APPROVAL_Jeff%20Lamptey.pdf text en staffonly http://ir.unimas.my/id/eprint/42072/6/Thesis%20PhD_Jeff%20Lamptey_24pages.pdf text en public http://ir.unimas.my/id/eprint/42072/11/Thesis%20PhD_Jeff%20Lamptey.fulltext.pdf text en validuser phd doctoral Universiti Malaysia Sarawak Faculty of Economics and Business
institution	Universiti Malaysia Sarawak
collection	UNIMAS Institutional Repository
language	English English English
topic	HG Finance
spellingShingle	HG Finance JEFF, LAMPTEY Working Capital Management of Small and Medium-Sized Enterprises (SMEs) in Accra, Ghana: The Perspective of Owner Managers’ Behavioral Biases
description	This thesis aims to investigate the working capital management of Small and Medium-Sized Enterprises (SMEs) in Accra, Ghana from the perspective of owner managers’ behavioral biases. Knowledge about behavioral biases in working capital management has lagged despite the fact that most Small and Medium Enterprises (SMEs) managers who employed a subjective approach to working capital management may expose themselves to overconfidence, Loss aversion, anchoring, and adjustment biases. To address this concern, this thesis employed qualitative designs and obtained textual data through telephone interviews with thirty-five (35) SME owner-managers to obtain their perspective on these biases by exploring the basic assumptions of overconfidence theories (Better- than average effect; the illusion of control and excessive optimism and over the precision of knowledge), Loss aversion theory and anchoring and adjustment theory. Based on the thematic data analysis, this study finds support that SMEs owner-managers exhibit overconfidence, loss aversion, anchoring, and adjustment, influencing working capital management. Specifically, the results suggest that overconfident SME owner-managers believe that they possess superior financial ability, perfect industry knowledge and are optimistic about business success and wish to overinvest in working capital inventory if they have enough internal funds. Furthermore, the finding suggested that loss-averse SME owner-managers exhibited the fear of loss and costs disposition effects to the extent that highly loss-averse SMEs owner managers tend to underinvest in working capital inventory while low loss-averse SMEs managers tend to overinvest in working capital inventory. In terms of anchoring and adjustment bias, the results show that managers rely heavily on mental shortcuts or heuristics: self-generated and provided anchors in working capital management. More specifically, SMEowner-managers rely on customer trust, initial offers (price list,quotation), and market trends and demand (past and current sales). The premium managers attached to these anchors led them to either overinvest or underinvest in working capital. Specifically, low anchor (low initial offers and high growth market) tends to induce managers to increase working capital investment inventories while high anchor (high initial offer and declined market growth) discouraged SMEs managers to curtail working capital investment. Meanwhile, managers tend to grant more accounts receivable to highly trusted customers because of longstanding business relationships, taken as low default risk, than customers with a short-term business relationship. The study findings contribute by adding to the limited empirical evidence that exists on the influence of SMEs owner-manager overconfidence and inventory management, cash management, financing; SMEs owner managers’ loss aversion and inventory management and anchoring and adjustment bias of SMEs owner-managers, and inventory management, accounts receivable. By implication, the findings of this study support the theories of overconfidence, loss aversion theory, anchoring, and adjustment and add to broaden the scope of working management practices in SMEs. Finally, the study concludes that SMEs managers’ behavioral biases matter in working capital management.
format	Thesis
qualification_name	Doctor of Philosophy (PhD.)
qualification_level	Doctorate
author	JEFF, LAMPTEY
author_facet	JEFF, LAMPTEY
author_sort	JEFF, LAMPTEY
title	Working Capital Management of Small and Medium-Sized Enterprises (SMEs) in Accra, Ghana: The Perspective of Owner Managers’ Behavioral Biases
title_short	Working Capital Management of Small and Medium-Sized Enterprises (SMEs) in Accra, Ghana: The Perspective of Owner Managers’ Behavioral Biases
title_full	Working Capital Management of Small and Medium-Sized Enterprises (SMEs) in Accra, Ghana: The Perspective of Owner Managers’ Behavioral Biases
title_fullStr	Working Capital Management of Small and Medium-Sized Enterprises (SMEs) in Accra, Ghana: The Perspective of Owner Managers’ Behavioral Biases
title_full_unstemmed	Working Capital Management of Small and Medium-Sized Enterprises (SMEs) in Accra, Ghana: The Perspective of Owner Managers’ Behavioral Biases
title_sort	working capital management of small and medium-sized enterprises (smes) in accra, ghana: the perspective of owner managers’ behavioral biases
granting_institution	Universiti Malaysia Sarawak
granting_department	Faculty of Economics and Business
publishDate	2023
url	http://ir.unimas.my/id/eprint/42072/4/DECLARATION%20AND%20SUPERVISOR%20APPROVAL_Jeff%20Lamptey.pdf http://ir.unimas.my/id/eprint/42072/6/Thesis%20PhD_Jeff%20Lamptey_24pages.pdf http://ir.unimas.my/id/eprint/42072/11/Thesis%20PhD_Jeff%20Lamptey.fulltext.pdf
_version_	1804888421896814592

Working Capital Management of Small and Medium-Sized Enterprises (SMEs) in Accra, Ghana: The Perspective of Owner Managers’ Behavioral Biases

Similar Items