Abstract

http://ssrn.com/abstract=1328320
 
 

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Paper on the Causal Relationship in Organizational Levels of Slack, Risk, and Financial Performance by Manufacturing Companies


André Lima


Mackenzie Presbyterian University

Leonardo Cruz Basso


Mackenzie Presbiterian University - Business Administration

Herbert Kimura


Mackenzie Presbiterian University

January 15, 2009


Abstract:     
The purpose is to investigate the existence of a causal relationship in organizational levels of slack, risk, and corporate performance. The starting point is the assumption that the amount of organizational slack is a determining factor of risk reflected by the company, as well as of its performance. To test this relationship, we have considered the data of 218 manufacturing companies from 2001 to 2007, a part of these grouped through factorial analysis in such a way as to compose the three kinds of organizational slack under consideration: available, recoverable, and potential. The data were then placed in panel form and analyzed with the GMM. The results obtained confirm the assumption that organizational slack has a non-linear influence on performance.

Number of Pages in PDF File: 44

Keywords: Organizational slack, Risk, Financial performance, the Generalized Moments Method (GMM)

JEL Classification: A12, B21, D01

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Date posted: January 19, 2009  

Suggested Citation

Lima, André and Basso, Leonardo Cruz and Kimura, Herbert, Paper on the Causal Relationship in Organizational Levels of Slack, Risk, and Financial Performance by Manufacturing Companies (January 15, 2009). Available at SSRN: http://ssrn.com/abstract=1328320 or http://dx.doi.org/10.2139/ssrn.1328320

Contact Information

André Lima
Mackenzie Presbyterian University ( email )
Rua da Consolação 920
São Paulo, 010302907
Brazil
Leonardo Cruz Basso (Contact Author)
Mackenzie Presbiterian University - Business Administration ( email )
Rua da Consolacao, 896 7 - andar sala 73
01302-907 Sao Paulo
Brazil
+55 11 32368597 (Phone)
+55 11 32368600 (Fax)
Herbert Kimura
Mackenzie Presbiterian University ( email )
Rua da Consolacao, 896 - 6o andar
01302-907 Sao Paulo
Brazil
+55 11 3236-8589 (Phone)
+55 11 3236-8600 (Fax)
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