Article: Payable period and firm performance: the mediating role of relational capital Journal: International Journal of Productivity and Quality Management (IJPQM) 2025 Vol.44 No.3 pp.377 - 402 Abstract: The purpose of this paper is to examine the performance effect of payable period management from a relational capital perspective. The study uses the Prowess database to collect secondary panel data on relational capital [measured by business group (BG) affiliation], payable period, and other firm-specific characteristics for 1,841 Indian manufacturing firms. Further, it employs panel data regression analyses to test the effect of payable period management on firm performance in light of relational capital. In contrast to the existing literature, this study has revealed that the company's financial performance suffers significantly due to the high payable period. Further, it has been observed that a longer payable period results from a greater reliance on relational capital (as measured by BG affiliation). Altogether, these results highlight that relational capital mediates the relationship between payable period and firm performance. The present study develops an objective understanding of the significance of payable period management. To the best of our knowledge, this is the first study that argues that the payable period is not uniform across firms, and it varies significantly based on their affiliation to BG. Inderscience Publishers - linking academia, business and industry through research

Title: Payable period and firm performance: the mediating role of relational capital

Authors: Pushpesh Pant; Arun Kumar Biswal; Siva Krishna Golla

Addresses: Department of Operations, IMT Hyderabad, Shamshabad, Telangna, 501218, India ' Department of Operations, IMT Hyderabad, Shamshabad, Telangna, 501218, India ' School of Management Studies, National Forensic Sciences University, Gandhinagar, Gujarat, India

Abstract: The purpose of this paper is to examine the performance effect of payable period management from a relational capital perspective. The study uses the Prowess database to collect secondary panel data on relational capital [measured by business group (BG) affiliation], payable period, and other firm-specific characteristics for 1,841 Indian manufacturing firms. Further, it employs panel data regression analyses to test the effect of payable period management on firm performance in light of relational capital. In contrast to the existing literature, this study has revealed that the company's financial performance suffers significantly due to the high payable period. Further, it has been observed that a longer payable period results from a greater reliance on relational capital (as measured by BG affiliation). Altogether, these results highlight that relational capital mediates the relationship between payable period and firm performance. The present study develops an objective understanding of the significance of payable period management. To the best of our knowledge, this is the first study that argues that the payable period is not uniform across firms, and it varies significantly based on their affiliation to BG.

Keywords: relational capital; payable period; firm performance; panel data; business group; manufacturing firm.

DOI: 10.1504/IJPQM.2025.144897

International Journal of Productivity and Quality Management, 2025 Vol.44 No.3, pp.377 - 402

Received: 14 Feb 2023
Accepted: 17 Apr 2023
Published online: 07 Mar 2025 *

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Title: Payable period and firm performance: the mediating role of relational capital

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