Does Working Capital Affect Family Firms’ Decision-Making in Laos? Evidence from a Two-Wave Cross-Lagged Approach
Round 1
Reviewer 1 Report
The paper deas with an interesting topic on how decision making is exercised with small family firms in a developing market. The paper usitlizes questionnaire data giving useful insights on the topic under study. However, the paper has several defficiencies in terms of theoretical background, contribution to existing literature. I urge the author(s) to consider the following comments and improve the paper for potential future endeavours.
1) The introduction lacks a clear motivation for the study, and the scope of the study is not clearly justified. What makes Laos special for warranting examination? There is not analytic discussion on the specifics of this market in order the reader to understand the differences of this market relative to other developing countries.
2) Based on the above comment the contribution of the paper to existing literature is not clear and adequate to justify publication.
3) The theoretical framework in section 2.2 is very briefly discussed without the reader to understand the thoery behind the established hypotheses.
4) The data selection procedure requires more details on the sample selection process (do authors collected data from the exact same individuals during both periods? if not there is a serious concern on data validity). Also there must be details on the number of complete questionnaires, process of selection (were they face-to-face or electronic? if they were electronic how do you know that the same person respondedq?)
5) Have authors utilized a factor or principal component analysis on the questionnaire data? If yes more details on the extraction method and validity of factors must be offered.
6) On section 3.2 (lines 167-168) authors say that they constructed tests of the score at t-2 and based on the score at t-1. How this process has been employed? more details are required here.
7) results on section 4 are not discussed extensively and more analysis is required on this part of the paper.
8) correlation on table 1 are Pearson? Please explain
9) on page 7, line 236 authors state something about "the other study" what do you mean exactly? Please explain.
Author Response
Dear reviewer:
Thank you for your comment and for pointing out that we have clarify your further to improve our paper. We have carried out a revision version including introduction, existing literature, methods, results, and made response one by one. Please see the attachment for details.
Thank you again for your comments.
Sincerely
Hanvedes Daovisan
Author Response File: 
Author Response.pdf
Reviewer 2 Report
The topic of the paper is very interesting. However, the paper is not written very well, and there are several things that need to be improved.
1. The paper concluded that WC has a positive effect on FBDM. The authors include access to finance, cash flow, debt financing, stock mutual capital, growth capital, and profitability in WC. But I do not know why some of the items should be included. For example, for debt financing, the paper mentions long-term debt and accounts payable. But long-term debt, by definition, is not WC which is short-term. For cash flow, I think the authors refer to cash, which is one item in WC. Therefore, the paper may need to change “cash flow” to just “cash”. For growth capital, the paper includes employee growth, asset size, and market share. I do not know how the three items relate to WC. Further, profitability is not related to WC at all.
2. If the paper can include the survey that collects the data, it will help the readers better understand the paper. For example, the FBDM refers to financing, investment, and dividend decisions. Frankly they are so broad. Therefore, without looking at the questionnaire, it is really hard for readers to know what kind of decisions are affected by WC.
3. The paper mentions several times the “long-time” FBDM. But the data the paper uses is just over one-year period. Therefore, I am not sure how this short-term data can lead to the conclusion that is long-term in nature. Further, financing and investment decisions are generally long-term, therefore, I am not sure how the short-term WC can have a significant influence on them. And dividend decision is purely made by the management, and I am not sure how it will be related to WC.
4. If the paper can explain more in detail how it collects the data, that will be great.
5. The paper needs professional editing.
6. When the authors write the hypothesis, it is very general. For example, H1 says ACFI has a positive effect on FBMD. Then the paper finds that ACFI affects financing decision, not investment and dividend decisions. I am not sure if the authors can be more specific when writing hypothesis.
Author Response
Dear reviewer:
Thank you for your comment and for pointing out that we have clarify your further to improve our paper. We have carried out a revision version including data collection, hypothesis, conclusion, professional editing, and made response one by one. Please see the attachment for details.
Thank you again for your comments.
Sincerely
Hanvedes Daovisan
Author Response File: Author Response.pdf
Reviewer 3 Report
Your article is very interesting, and I am grateful for the opportunity to read it. I think that the idea and subject of the research is interesting, and the results of the research give a lot of new information and possibilities of further analysis.
Reading the text, I found several elements that I think would improve your article.
My first suggestion you have to change your language you use. It changes your article into statistical analysis.
There are too much abbreviations – the abbreviation can replace the phrases, but it is not only way to show something. You have to understand that you produce something for people to read so you should to make it user-friendly. If you write the article like this I think people will choose another because this one is hard to understand.
If you replace one-two phrases with the abbreviations permanently there is no problem. But if you make it in much more cases it makes reading difficult.
You use only abbreviation in Discussion part and Conclusion too. These are chapters to explain your analysis / statistical research. You use such sentences:
[219] “….. to estimate the effect of WC on FBDM at t1”
[234] “a positive cross-lagged effect on GRCA 234 and FBDM;”
[235] pathway from ACFI to GRCA
Etc.
In the conclusion part there is the same:
[284-285] we found that the success of SFFs largely depends on ACFI, CAFL, DEFI, INVE, GRCA, and PROF to attain optimal FBDM
[291-292] in that it is relevant to associate WC with ACFI, CAFL, DEFI, INVE, GRCA, and PROF.
Imagine someone who would like to quote your article - especially this conclusion.
My view, you have to change it and make it much more understandable for readers. This article tries to show/explain something important, but it is unclear. If you write about economy, you can’t only use the statistical language. Statistical analysis is only a tool that helps explain some economic problem. Economics is social science so please explain your output in economic not statistical language.
E.g. if you use Lao PDR in international journal you should to remember that your readers could live e.g. in Europe and they can’t know what is this PDR. You have to explain this at the beginning.
Chapter 2, 3, 4 these chapters are very well written
Chapter 2
I have not seen such well-presented hypotheses and their description and explanation for a long time - a very good part of the article. I appreciate how clear you built all these hypotheses. Good job!
Chapters 3
Method description
This chapter is a very synthetic description of the method and measurement - it is appropriate for me.
Chapter 4. Presentation of research results. For me, everything is clear and very precisely presented
Chapter 5. [Discussion - this chapter has wrong number - 4. Should be 5.]
This chapter is well built clear, similar to previous chapters, the structure of this chapter is appropriate
Conclusion - this chapter should be extended. For me, the summary is too limited, there is no reference to reality to the outside world and to other studies. At this point, you should show a broader aspect of your research and possible impact on other areas or other economies.
Summarizing.
This is a very interesting article and interesting research. I think that it is necessary to improve the language. An important aspect is the introduction and the first part of second chapter - these parts need improvement.
You have to understand that people would like to read your article but the language you use is too synthetic and statistical, you should explain it for the readers - research are done not for research alone.
I suggest little changes in the Conclusions part.
I really like your article and appreciate your work. It is interesting topic and the conclusions open the way for further research.
Good luck!
Author Response
Dear reviewer:
Thank you for your comment and for pointing out that we have clarify your further to improve our paper. We have carried out a revision version including abbreviations, statistical language, method description, conclusion, and made response one by one. Please see the attachment for details.
Thank you again for your comments.
Sincerely
Hanvedes Daovisan
Author Response File: Author Response.pdf
Round 2
Reviewer 1 Report
I would like to thank the authors for their effort to address all comments raised. I believe authors have done a significant effort to improve the paper. The main sections have become clearer to the reader, along with the motivation and contribution of the study.
Reviewer 3 Report
Dear Sirs
Thank you very much for the opportunity to cooperate with you. It is rare that that the response to suggestions is so broad and affects so many elements. Thank you for your work, it is much easier to read and understand the results of your interesting survey.
I would like to emphasize the fact that your research is extremely interesting and shows the scope and scale of working capital involvement for family businesses. This is a very interesting analysis.
