Flexibility-Efficiency Tradeoff and Performance Implications Among Chinese SOEs

7 Pages Posted: 28 Mar 2010  

Justin Tan

York University - Schulich School of Business

Liang Wang

York University - Schulich School of Business

Date Written: 2010

Abstract

This paper examines performance implications of the flexibility-efficiency tradeoff in the turbulent environment. We test the relationship between resource utilization and firm performance among the Chinese state owned enterprises (SOEs) during China’s economic transformation. The study finds that (1) overall efficiency enhances performance; (2) different measures of efficiency all exhibit curvilinear relationship with performance; (3) differences exist between high-efficiency and low-efficiency subgroups of firms. The results reveal that efficiency as well as flexibility has a positive impact on firm performance only within a certain range. Beyond a certain point, the cost of maintaining flexibility overwhelms the benefit, causing performance to decline.

Keywords: China, flexibility-efficiency tradeoff, resource-based view, dynamic capabilities, state owned enterprises

Suggested Citation

Tan, Justin and Wang, Liang, Flexibility-Efficiency Tradeoff and Performance Implications Among Chinese SOEs (2010). Journal of Business Research, Vol. 63, No. 4, pp. 356-362, 2010. Available at SSRN: https://ssrn.com/abstract=1577423

Justin Tan (Contact Author)

York University - Schulich School of Business ( email )

4700 Keele Street
Toronto, Ontario M3J 1P3
Canada

HOME PAGE: http://www.schulich.yorku.ca/SSB-Extra/Faculty.nsf/faculty/Tan%20Justin

Liang Wang

York University - Schulich School of Business ( email )

4700 Keele Street
Toronto, Ontario M3J 1P3
Canada

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