What is it about?
The article that served as the source and inspiration for the information presented on this page was originally published under the title. "Ulusal plândan uluslararası rekabete bir karşılaştırma: Erdemir ve Posco için çalışma sermayesi etkinlik ölçümü (2011-2021)” in “Aksaray Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi”, dated 2024, Volume 16(1), pp. 17-28. The content below offers informative and explanatory insights that include personal perspectives on the topic. You are welcome to share your questions, comments and suggestions via the contact channels and academic/social platforms listed in the menus on the right. The author(s) expect proper citation of their original work as a recognition of their scholarly contribution published in peer-reviewed scientific journals. Therefore, please refrain from citing this page and instead cite the original article. Please note that this text serves primarily as an introduction and expression of viewpoints. Thank you for your understanding. What’s this about? Well, imagine the wild rollercoaster of the 20th century; wars, economic chaos, and hyperinflation shaking things up like never before. From this madness came clever new ways to tackle economic challenges, including planned economies and development plans aiming to build trust and boost growth. In this study, we zoom in on two heavyweight steel giants, Posco from South Korea and Erdemir from Turkey, born in the same era but now locked in international competition. Using Bhattacharya’s index, we measured how well these companies managed their working capital from 2011 to 2021. Spoiler alert: both are pretty darn efficient. We also connect their ups and downs to global economic waves, proving our method’s on point and the results matching what theory predicts. Basically, it’s a friendly steel showdown with some serious number crunching!
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Why is it important?
Why is this important: Because national industry and development aren’t just “choose your own adventure” options for countries; they’re survival kits in the wild global jungle. To stay in the game, protect your turf, and actually win something, a country’s got to keep its industrial engines humming and play nice on the global stage. Take South Korea and Turkey, for example, both had their own rollercoaster rides post-WWII, juggling wars, economic crises, and a dash of Cold War drama. Yet, both learned that strong industry isn’t about making some elite club richer; it’s about making the whole community better off. It’s like a big team effort where everyone scores. Industrial growth wasn’t a walk in the park; think planned economies, import substitution, export booms, and some serious government babysitting. Both countries crafted multi-year plans, dodged economic potholes, and aimed to turn scrap and sweat into steel and success. Bottom line: managing working capital in heavy industries like steel and shipbuilding isn’t just crunching numbers. It’s like tightrope walking over a pit of market shocks, currency swings, and climate regulations. Nail it, and you boost efficiency, keep the wheels turning, and maybe even impress the global crowd. So yeah, behind the scenes of those giant ships and massive steel mills, there’s some serious money choreography happening and that’s why it matters.
Perspectives
In my view, working capital management stands as a crucial factor in controlling liquidity, organizing receivables, meeting debt obligations, and managing short-term financing needs without taking excessive risks, all while ensuring effective inventory control. However, it should be understood that while good working capital management helps firms overcome short-term financial challenges, it does not guarantee continuous profit growth. Since it focuses on short-term assets and liabilities, it does not fully reflect a company’s long-term economic health. This study measures the working capital efficiency of two leading steel producers, Turkey’s Erdemir and South Korea’s Posco, both established during national five-year development plans and now international competitors, using Bhattacharya’s index method. Between 2011 and 2021, both companies consistently demonstrated values above 1, indicating effective working capital management. Erdemir’s average efficiency index of 3.69 reflects positive impacts of investments in current assets such as cash, receivables, and inventories on sales. Similarly, Posco’s average of 3.35 shows strong management, despite challenges like the 2020 global steel market contraction due to the COVID-19 pandemic. Periods of lower index values correlate with steel market cycles, commonly known as steel “volcanoes” and “death spirals”, where sudden price surges or drops create volatile conditions. These fluctuations profoundly impact the industry’s working capital decisions and highlight the importance of accurate forecasting. Beyond business metrics, the story of Erdemir and Posco reflects a deeper bond between Turkey and South Korea. Both companies emerged from post-war development plans aimed at national progress. Notably, Turkey’s early development efforts and Erdemir’s example drew the attention of South Korea during Posco’s founding years. This shared history symbolizes the friendship and mutual inspiration between the two nations, united by common goals and industrial ambition. In an era of global uncertainty and economic shocks, the lessons from Erdemir and Posco’s working capital management offer valuable insights. Protecting liquidity, carefully balancing investments, and adapting to external pressures are vital strategies, especially for steel firms playing a key role in both national economies and international trade. In sum, this study not only confirms the efficiency of these two steel giants but also underscores the enduring cooperation and shared industrial spirit between Turkey and South Korea. PLEASE NOTE THAT THE CONTENTS ON THIS PAGE ARE NOT IDENTICAL TO THOSE PRESENTED IN THE ORIGINAL STUDY. FOR INFORMATION, COMMENTS, OR SUGGESTIONS, PLEASE CONTACT THE AUTHORS.
Ümit Remzi Ergün
Canakkale Onsekiz Mart Universitesi
Read the Original
This page is a summary of: Ulusal Plândan Uluslararası Rekabete Bir Karşılaştırma: Erdemir ve Posco için Çalışma Sermayesi Etkinlik Ölçümü (2011-2021), Aksaray Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, March 2024, Aksaray University,
DOI: 10.52791/aksarayiibd.1341322.
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