Working capital management strategies during economic crisis – A scoping review

Effective working capital management (WCM) plays a pivotal role in mitigating financial distress during periods of economic crisis. During such periods, firms often face funding constraints caused by restricted credit access, liquidity shortages, and macroeconomic instability, all of which impair the firm’s capacity to manage short-term assets and liabilities efficiently. This study presents a scoping review aimed at evaluating how firms across various industries implement working capital management strategies during times of crisis. Relevant literature was systematically identified and reviewed from four major databases: Scopus, ScienceDirect, Emerald Insight, and EBSCOhost. The inclusion criteria focused on empirical studies that analysed the relationship between working capital management and firm performance during economic downturns, particularly the 2008 Global Financial Crisis and the COVID-19 pandemic, using panel data methodologies. The findings reveal significant heterogeneity in WCM strategies adopted by firms across different countries and industrial sectors in response to financial shocks. Notably, financial practices diverge according to regional economic structures, industry-specific dynamics, and institutional settings. Moreover, the literature is largely concentrated on the manufacturing sector, small and medium enterprises (SMEs), and publicly listed firms, with limited exploration into service-based industries. The hospitality and tourism sectors—arguably among the most affected by the COVID-19 crisis—remain underrepresented in current research. This review highlights the importance for financial managers to tailor WCM approaches to the specific characteristics of their industry and regional context. The findings underscore a critical research gap, suggesting a need for further empirical inquiry into WCM practices in service-oriented sectors, especially during and after pandemic-induced economic disruptions.