Working capital management of SMEs in COVID-19: role of managerial personality traits and overconfidence behavior

Abstract

The study intends to investigate the role of managerial personality traits on working capital management of Chinese SMEs with the mediating role of overconfidence behavior. Data from the Chinese SMEs managers is collected through a close-ended survey questionnaire using multi-stage cluster sampling and structural equation modeling is applied for empirical analysis. The results shown that extroversion, openness to experience, and agreeableness traits determines overconfidence behavior among the managers. While, conscientiousness and neuroticism traits were found insignificant with overconfidence behavior. Overconfidence behavior significantly mediated during COVID-19 between managerial personality traits (e.g., extroversion and agreeableness traits) and working capital management. Limitted time remained a major limitation in completing this study. The study extended the knowledge by investigating the working capital management practices during COVID-19 in Chinese SMEs and contributed by presenting multiple practical implications for effective working capital management.