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Slack resources, firm performance and the institutional context : evidence from privately held European firms

(2017) STRATEGIC MANAGEMENT JOURNAL. 38(6). p.1305-1326
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Abstract
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.
Keywords
creditor rights, employee rights, slack resources, performance, private firms

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Chicago
Vanacker, Tom, Veroniek Collewaert, and Shaker Zahra. 2017. “Slack Resources, Firm Performance and the Institutional Context : Evidence from Privately Held European Firms.” Strategic Management Journal 38 (6): 1305–1326.
APA
Vanacker, T., Collewaert, V., & Zahra, S. (2017). Slack resources, firm performance and the institutional context : evidence from privately held European firms. STRATEGIC MANAGEMENT JOURNAL, 38(6), 1305–1326.
Vancouver
1.
Vanacker T, Collewaert V, Zahra S. Slack resources, firm performance and the institutional context : evidence from privately held European firms. STRATEGIC MANAGEMENT JOURNAL. Wiely; 2017;38(6):1305–26.
MLA
Vanacker, Tom, Veroniek Collewaert, and Shaker Zahra. “Slack Resources, Firm Performance and the Institutional Context : Evidence from Privately Held European Firms.” STRATEGIC MANAGEMENT JOURNAL 38.6 (2017): 1305–1326. Print.
@article{8067860,
  abstract     = {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.},
  author       = {Vanacker, Tom and Collewaert, Veroniek and Zahra, Shaker},
  issn         = {0143-2095},
  journal      = {STRATEGIC MANAGEMENT JOURNAL},
  keywords     = {creditor rights,employee rights,slack resources,performance,private firms},
  language     = {eng},
  number       = {6},
  pages        = {1305--1326},
  publisher    = {Wiely},
  title        = {Slack resources, firm performance and the institutional context : evidence from privately held European firms},
  url          = {http://dx.doi.org/10.1002/smj.2583},
  volume       = {38},
  year         = {2017},
}

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