“…As mentioned, studies linking flexibility or slack to efficiency usually use financial performance, and more precisely ROA, as an approach for efficiency, or merely as a measure of financial performance (e.g. Tan and Peng, 2003;Eben and Johnson, 2005;Tan and Wang, 2010;Bradley et al, 2011). Firms giving priority to current profitability will be more prone to apply measures that render higher profitability in the short run, and thus a more favourable change in profitability, with respect to those that do not have such priority.…”