Accounts Receivable and Firm Value: Evidence from South Asian Emerging Economies

This study examines the relationship between accounts receivable and value of firm for sample firms in South Asian emerging economies from period 2011 to 2018. Considering two fold effects of costs and benefits of capital invested in receivables, study estimate a nonlinear relation between receivables level and value of firm. Results revealed positive relationship between these two where lower amount stuck in receivables and negative relation where greater amount is stuck in receivables. To give robustness to the findings study used two alternative proxy to calculate value of firm, one is Tobin’s q and second measure is market to book ratio and found consistent result