Financial Slack, Operational Slack and Firm Performance during Episodes of Financial Crises: A Panel Data Analysis

Chu, Shun-Ho; Ren, Yueming; Cai, H.; Xu, Yu; Bao, Siyuan

doi:10.1109/pmis52742.2021.00039

Cited by 2 publications

(1 citation statement)

References 18 publications

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“…While there are many studies on the effect of financial slack on firm performance (i.e. Putri et al, 2019;Jermias & Yigit, 2023;Odum et al, 2019;Tran et al, 2018;Yudhanti & Roida, 2022;Feng et al, 2020;Chu et al, 2021;Tabassam & Khan, 2021;Rafailov, 2017;Vanacker et a., 2017;George, 2005;Titus et al, 2022), there are only few studies on its effect on firm innovativeness (i.e. Heubeck & Meckl, 2023;Duan et al, 2020;Lee, 2015;Marlin & Geiger, 2015;Hong & Shin, 2021;Meyer & Leitner, 2018;Hong & Shin, 2016;Lewis, 2013;Beck & Beuren, 2022), much less in the Indonesian setting (i.e.…”

Section: Average Firm Innovativeness For Consumer Goods Manufacturing...mentioning

confidence: 99%

The Influence of Financial Slack on Firm Innovativeness: The Moderating Role of Board Size

Sari

2023

IJAIR

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This study aims to investigate the influence of financial slack on firm innovativeness, with board of commissioners and the board of directors as moderating variables. The population of this study consists of 61 companies listed in the Indonesian Stock Exchange, but during the course of the research, some companies were eliminated due to incomplete relevant data from year 2016 to 2021. After the statistical analysis and modelling, this study found that financial slack does not influence firm innovativeness. Similarly, the moderating variables, board of commissioners and the board of directors, also do not moderate the influence of financial slack on firm innovativeness. Hence, the results contradict the hypothesized relationships. This study argues that these findings might be influenced by the economic conditions in Indonesia at that time of the COVID-19 pandemic. As a result, companies shifted their focus and priorities, placing a higher emphasis on the financial health and risk management of the company rather than using excess resources to enhance corporate innovation. While this study is limited to the available sample size, as not all companies allocate their funds for innovation activities, its novelty lies in the inclusion of the board of commissioners and the board of directors as moderating variables in examining the influence of financial slack on firm innovativeness. As such, the research model and findings contribute to the diversity of existing research outcomes on similar topics.

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Section: Average Firm Innovativeness For Consumer Goods Manufacturing...mentioning

confidence: 99%

The Influence of Financial Slack on Firm Innovativeness: The Moderating Role of Board Size

Sari

2023

IJAIR

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Organizational slack, entrepreneurial orientation, and corporate political activity: From the behavioral theory of the firm

Gao

2023

Humanit Soc Sci Commun

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As a popular non-market strategy, corporate political activity (CPA) benefits a firm’s risk management and competitive advantage. However, the mechanism of promoting firms to engage in corporate political activity remains obscure. Based on the behavioral theory of the firm, this research develops a mediation model containing organization slack, entrepreneurial orientation, and corporate political activity to investigate the prediction effect of different types of slack, as well as the mediation effect of different dimensions of entrepreneurial orientation. Based on the multiple informant data from 303 firms in China, this research conducted ordinary least-squares estimation with SPSS and post hoc analysis with PROCESS. The results support the main and key hypotheses. First, entrepreneurial orientation plays a mediation effect between slack and corporate political activity. Second, financial slack provides stronger support to develop certain capabilities than operational slack. Third, two sub-dimensions of entrepreneurial orientation play heterogeneous mediation effects according to their different emphasis. Managerial attitude also mediates the effect of entrepreneurial behavior effect toward CPA. This research enriches the antecedent research of CPA, deepens our understanding of the CPA engagement mechanism, and extends the behavioral theory of the firm.

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Financial Slack, Operational Slack and Firm Performance during Episodes of Financial Crises: A Panel Data Analysis

Cited by 2 publications

References 18 publications

The Influence of Financial Slack on Firm Innovativeness: The Moderating Role of Board Size

The Influence of Financial Slack on Firm Innovativeness: The Moderating Role of Board Size

Organizational slack, entrepreneurial orientation, and corporate political activity: From the behavioral theory of the firm

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