Firm-level geopolitical risk and working capital adjustment across the firm life cycle: Evidence from a middle-income economy

• Firm-level geopolitical risk increases the cash conversion cycle. • Higher firm-level geopolitical risk slows the speed of working capital adjustment. • Business group firms adjust faster than non-business group firms under geopolitical risk. • Growth and mature firms adjusting working capital more quickly under geopolitical risk. This study examines how firm-level geopolitical risk affects the speed of working capital adjustment in Indian firms, with a focus on business group affiliation and firm life cycle stages. We find that firm-level geopolitical risk decreases working capital speed of adjustment, reflecting heightened financial responsiveness to external uncertainty. Business group firms adjust faster, likely due to easier access to internal capital markets. Growth and mature-stage firms also show faster adjustment, while introduction and decline firms respond more cautiously, suggesting conservatism and resource slack.