Article: Inventory turnover and corporate performance in an emerging market: a nonlinear dynamic analysis Journal: International Journal of Business Excellence (IJBEX) 2026 Vol.38 No.11 pp.1 - 22 Abstract: This study investigates the dynamic nonlinear relationship between inventory turnover and corporate performance in Vietnam, an emerging market. Utilising a panel dataset comprising 7,261 firm-year observations from 571 non-financial firms listed on the Vietnamese stock exchange between 2008 and 2022, we apply the least squares dummy variable corrected (LSDVC) estimator to address dynamic panel bias, endogeneity, and unobserved heterogeneity. The empirical findings consistently reveal a significant inverted U-shaped relationship between inventory turnover and corporate performance, indicating that increasing inventory turnover enhances profitability up to an optimal threshold, beyond which excessive inventory reduction diminishes performance due to higher operational risk and reduced flexibility. Robustness tests using alternative performance measures, inventory metrics, and the system GMM estimator confirm the stability of this nonlinear effect. By identifying the turnover level that maximises firm performance, this study contributes to the inventory-finance literature and offers practical guidance for firms seeking to optimise inventory strategies in emerging markets. Inderscience Publishers - linking academia, business and industry through research

Title: Inventory turnover and corporate performance in an emerging market: a nonlinear dynamic analysis

Authors: Phan Tran Minh Hung; Thi Kim Nguyen; Pham Thi Be Loan; Trinh Vo Hoang Diem

Addresses: Hong Bang International University, 215 Dien Bien Phu Street, Gia Dinh Ward, Ho Chi Minh City, 70000, Vietnam ' Excelsia University College, 1 City View Road, Pennant Hills, 2120, Australia ' University of Economics, The University of Danang, 71 Ngu Hanh Son, Danang, 550000, Vietnam ' University of Economics, The University of Danang, 71 Ngu Hanh Son, Danang, 550000, Vietnam

Abstract: This study investigates the dynamic nonlinear relationship between inventory turnover and corporate performance in Vietnam, an emerging market. Utilising a panel dataset comprising 7,261 firm-year observations from 571 non-financial firms listed on the Vietnamese stock exchange between 2008 and 2022, we apply the least squares dummy variable corrected (LSDVC) estimator to address dynamic panel bias, endogeneity, and unobserved heterogeneity. The empirical findings consistently reveal a significant inverted U-shaped relationship between inventory turnover and corporate performance, indicating that increasing inventory turnover enhances profitability up to an optimal threshold, beyond which excessive inventory reduction diminishes performance due to higher operational risk and reduced flexibility. Robustness tests using alternative performance measures, inventory metrics, and the system GMM estimator confirm the stability of this nonlinear effect. By identifying the turnover level that maximises firm performance, this study contributes to the inventory-finance literature and offers practical guidance for firms seeking to optimise inventory strategies in emerging markets.

Keywords: inventory turnover; corporate performance; panel data estimation; least squares dummy variable corrected; LSDVC; dynamic panel model.

DOI: 10.1504/IJBEX.2026.153989

International Journal of Business Excellence, 2026 Vol.38 No.11, pp.1 - 22

Received: 22 Dec 2025
Accepted: 02 Apr 2026
Published online: 09 Jun 2026 *

Title: Inventory turnover and corporate performance in an emerging market: a nonlinear dynamic analysis

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