The cash conversion cycle spread in China

We investigate the relation between the cash conversion cycle (CCC) and the cross section of stock returns in the US and Chinese markets. By replicating the main results of Wang (2019), we find no evidence of the CCC effect in the Chinese market over the sample period 2002–2019. The results remain robust when microcap stocks are excluded from the sample. We also find that the components of the CCC play different roles in stock returns between the two markets. Further analysis shows that the CCC effect mainly exists in periods before 2002 in the US market. This suggests that the results of Wang (2019) may be sample specific.