Slack Resources and the Performance of Privately Held Firms
Singapore Management University
Academy of Management Journal, Vol. 48, 2005
Empirical findings from publicly traded firms and behavioral theory arguments suggest a positive influence of resource slack on financial performance. While this area has remained unexplored in privately held firms, conceptual arguments indicate that resource constraints may serve to enhance performance. Longitudinal data on 900 privately held firms confirm the differential influence of forms of slack on performance. Results indicate that a combination of behavioral and resource-constraints arguments are necessary to explain the slack-performance relationship in privately held firms.
Number of Pages in PDF File: 36
Keywords: Resources, slack, endowments, efficiency, performance, private firms, family business
JEL Classification: D21, D23, D24, G32, L23, M13, M1
Date posted: July 15, 2004