Asset Details
Do you wish to reserve the book?
SLACK RESOURCES, FIRM PERFORMANCE, AND THE INSTITUTIONAL CONTEXT: EVIDENCE FROM PRIVATELY HELD EUROPEAN FIRMS
Hey, we have placed the reservation for you!
By the way, why not check out events that you can attend while you pick your title.
Oops! Something went wrong.
Looks like we were not able to place the reservation. Kindly try again later.
Are you sure you want to remove the book from the shelf?
SLACK RESOURCES, FIRM PERFORMANCE, AND THE INSTITUTIONAL CONTEXT: EVIDENCE FROM PRIVATELY HELD EUROPEAN FIRMS
Do you wish to request the book?
SLACK RESOURCES, FIRM PERFORMANCE, AND THE INSTITUTIONAL CONTEXT: EVIDENCE FROM PRIVATELY HELD EUROPEAN FIRMS
Please be aware that the book you have requested cannot be checked out. If you would like to checkout this book, you can reserve another copy
We have requested the book for you!
Your request is successful and it will be processed during the Library working hours. Please check the status of your request in My Requests.
Oops! Something went wrong.
Looks like we were not able to place your request. Kindly try again later.
Journal Article
SLACK RESOURCES, FIRM PERFORMANCE, AND THE INSTITUTIONAL CONTEXT: EVIDENCE FROM PRIVATELY HELD EUROPEAN FIRMS
2017
Overview
Research summary: Integrating the behavioral and institutional perspectives, we propose that a country's formal institutions, particularly its legal frameworks, affect managers' deployment of slack resources. Specifically, we explore the moderating effects of creditor and employee rights on the performance effects of slack. Using longitudinal data from 162,633 European private firms in 26 countries, we find that financial slack enhances firm performance at diminishing rates, whereas human resource (HR) slack lowers performance at diminishing rates. However, financial slack has a more positive effect on firm performance in countries with weaker creditor rights, whereas HR slack has a more negative effect on performance in countries with stronger employee rights. The results provide a richer view of the relationship between slack and firm performance than currently assumed in the literature. Managerial summary: A key dilemma managers often encounter is whether, on the one hand, they should build in excess resources to buffer their firms from internal and external shocks and to pursue new opportunities or whether, on the other hand, they should develop \"lean\" firms. Our study suggests that excess cash resources—which are usually viewed as easy to redeploy—benefit firm performance, especially when firms operate in countries with weaker creditor rights. However, excess human resources—which are usually viewed as more difficult to redeploy—hamper firm performance, particularly when firms operate in countries with stronger labor protection laws. Thus, the management of slack resources critically depends on the characteristics of these resources (e.g., redeployability) and the institutional context in which managers operate.
Publisher
John Wiley & Sons Ltd,John Wiley & Sons, Ltd,Wiley Periodicals Inc
