Optimizing liquidity for technological advancement: A strategic model for 4IR manufacturing in Oman

Abstract

This study investigates the strategic nexus between liquidity optimization and the adoption of Fourth Industrial Revolution (4IR) technologies in driving sustainable manufacturing performance in Oman. Utilizing panel data from 25 publicly listed manufacturing firms on the Muscat Stock Exchange over the period 2013–2023, the research applies fixed-effects and random-effects regression models, complemented by mediation analysis, to evaluate how effective liquidity practices—measured through cash conversion cycle, inventory turnover, and receivables/payables efficiency—impact operational and financial performance. Findings demonstrate that firms with optimized liquidity structures exhibit superior return on assets (ROA) and return on equity (ROE), while also being better positioned to adopt critical 4IR technologies, including artificial intelligence (AI), the Internet of Things (IoT), and automation. Technological adoption mediates nearly 29% of liquidity’s influence on performance, emphasizing its pivotal role in transforming financial efficiency into digital capability. The study proposes a strategic model linking financial management and digital transformation, offering practical implications for industrial policymakers and business leaders under Oman Vision 2040. It fills a crucial gap in the literature by integrating liquidity strategy with technological advancement to enhance competitiveness and sustainability in emerging economies.