Slack Resources and the Performance of Privately Held Firms

36 Pages Posted: 15 Jul 2004

See all articles by Gerard George

Gerard George

Singapore Management University

Abstract

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.

Keywords: Resources, slack, endowments, efficiency, performance, private firms, family business

JEL Classification: D21, D23, D24, G32, L23, M13, M1

Suggested Citation

George, Gerard, Slack Resources and the Performance of Privately Held Firms. Academy of Management Journal, Vol. 48, 2005. Available at SSRN: https://ssrn.com/abstract=564585

Gerard George (Contact Author)

Singapore Management University ( email )

469 Bukit Timah Road
Singapore 912409
Singapore

HOME PAGE: http://www.smu.edu.sg/faculty/profile/118836/Gerry-GEORGE

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