Testing a Causal Model of Corporate Risk Taking and Performance.

Organizational slack and firm performance during institutional transitions

“…Based on the resource-based view, proponents of the positive slack-performance link suggest that organizational slack can contribute to competitive advantage by performing as the "payments to members of the coalition in excess of what is required to maintain the organization" (Cyert & March, 1963: 36), relaxing the internal boundaries and supporting innovations (Nohria & Gulati, 1996), and helping its possessors respond better to the environmental changes (Bromiley, 1991;Cheng & Kesner, 1997). In contrast, the opponents argue that organizational slack may lead to organizational inertia (Leonard-Barton, 1992).…”

Japanese horizontal keiretsu and the performance implications of membership

“…We employed the export ratio as geographical expansion, which is hypothesized to influence firm risk negatively. In addition, we include a measure of slack resources in our models since scholars have found that a firm's slack has a significant effect on firm risk and return given that these resources facilitate information gathering and environmental adaptation (Bourgeois & Singh, 1983;Bromiley, 1991;Greve, 2004). Following prior studies, we use the current ratio (ratio of current asset to liabilities) and debt ratio (the ratio of debt to equity) to measure the degree of slack resources.…”

The Impact of Business Life Cycle and Performance Discrepancy on R&D Expenditures-Evidence from Taiwan

“…Following previous studies (Audia and Greve, 2006;Bromiley, 1991;Cyert and March, 1992;Lant, 1992;Wiseman and Bromiley,1996;Greve, 2003b;Miller and Chen, 2004;Iyer and Miller, 2008), we use a firm's Return on Assets (ROA) in year t-2 as the firm's expected performance (A i,t-2 ), and the firm's ROA in year t-1 as the firm's actual performance (P i,t-1 ). The difference between actual performance and expected performance represents the firm's performance discrepancy.…”