An empirical analysis of the curvilinear relationship between slack and firm performance

This study performs an in-depth analysis of the curvilinear relationship between slack and future firm performance. Using a sample of US firms, we analyze the influence of three indicators of absorbed and unabsorbed slack on the two commonest dimensions of firm performance: profitability and sales g...

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Detalhes bibliográficos
Autores: Garcia-Blandon, Josep, Martinez-Blasco, Monica, Argilés-Bosch, J.M., Ravenda, Diego
Formato: artículo
Estado:Versión aceptada para publicación
Fecha de publicación:2018
País:España
Recursos:Universitat Ramon Llull (URL)
Repositorio:DAU Arxiu Digital de la Universitat Ramon Llull
OAI Identifier:oai:dau.url.edu:20.500.14342/1018
Acesso em linha:http://hdl.handle.net/20.500.14342/1018
https://doi.org/10.1007/s00187-018-0270-4
Access Level:acceso abierto
Palavra-chave:Beneficis
Vendes--Direcció i administració
Profitability
Sales growth
Slack
Non-linear relationship
Absorbed slack
Unabsorbed slack
65
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oai_identifier_str oai:dau.url.edu:20.500.14342/1018
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repository_id_str
spelling An empirical analysis of the curvilinear relationship between slack and firm performanceGarcia-Blandon, JosepMartinez-Blasco, MonicaArgilés-Bosch, J.M.Ravenda, DiegoBeneficisVendes--Direcció i administracióProfitabilitySales growthSlackNon-linear relationshipAbsorbed slackUnabsorbed slack65This study performs an in-depth analysis of the curvilinear relationship between slack and future firm performance. Using a sample of US firms, we analyze the influence of three indicators of absorbed and unabsorbed slack on the two commonest dimensions of firm performance: profitability and sales growth. Although the relationship between most slack variables and firm performance is curvilinear, the inflection points (for both maximums and minimums) lie mainly outside the distribution range of the slack variables and, consequently, the curvilinear relationships between slack and performance are, in fact, neither U-shaped nor inverted U-shaped. Therefore, the influence of slack on performance can be positive or negative: linear for certain variables, but concave/convex for most variables analyzed in our study. An additional important finding is that the influence of slack on future profitability is usually the opposite of its influence on future sales growth: negative and positive, respectively, for absorbed slack; positive and negative, respectively, for financial slack. Results are robust to different lagged periods of the independent variables. The effects of equity and cash slacks on future performance are mainly negative, especially for longer time periods.Springer VerlagUniversitat Ramon Llull. IQS20202023202020232018info:eu-repo/semantics/articleinfo:eu-repo/semantics/acceptedVersion49 p.application/pdfhttp://hdl.handle.net/20.500.14342/1018https://doi.org/10.1007/s00187-018-0270-4RECERCAT (Dipòsit de la Recerca de Catalunya)reponame:DAU Arxiu Digital de la Universitat Ramon Llullinstname:Universitat Ramon Llull (URL)InglésJournal of Management Control. Vol.29, n.3-4 (2018), p.361-397© Springer-Verlag GmbH Germany. Tots els drets reservatsinfo:eu-repo/semantics/openAccessoai:dau.url.edu:20.500.14342/10182026-06-21T06:40:37Z
dc.title.none.fl_str_mv An empirical analysis of the curvilinear relationship between slack and firm performance
title An empirical analysis of the curvilinear relationship between slack and firm performance
spellingShingle An empirical analysis of the curvilinear relationship between slack and firm performance
Garcia-Blandon, Josep
Beneficis
Vendes--Direcció i administració
Profitability
Sales growth
Slack
Non-linear relationship
Absorbed slack
Unabsorbed slack
65
title_short An empirical analysis of the curvilinear relationship between slack and firm performance
title_full An empirical analysis of the curvilinear relationship between slack and firm performance
title_fullStr An empirical analysis of the curvilinear relationship between slack and firm performance
title_full_unstemmed An empirical analysis of the curvilinear relationship between slack and firm performance
title_sort An empirical analysis of the curvilinear relationship between slack and firm performance
dc.creator.none.fl_str_mv Garcia-Blandon, Josep
Martinez-Blasco, Monica
Argilés-Bosch, J.M.
Ravenda, Diego
author Garcia-Blandon, Josep
author_facet Garcia-Blandon, Josep
Martinez-Blasco, Monica
Argilés-Bosch, J.M.
Ravenda, Diego
author_role author
author2 Martinez-Blasco, Monica
Argilés-Bosch, J.M.
Ravenda, Diego
author2_role author
author
author
dc.contributor.none.fl_str_mv Universitat Ramon Llull. IQS
dc.subject.none.fl_str_mv Beneficis
Vendes--Direcció i administració
Profitability
Sales growth
Slack
Non-linear relationship
Absorbed slack
Unabsorbed slack
65
topic Beneficis
Vendes--Direcció i administració
Profitability
Sales growth
Slack
Non-linear relationship
Absorbed slack
Unabsorbed slack
65
description This study performs an in-depth analysis of the curvilinear relationship between slack and future firm performance. Using a sample of US firms, we analyze the influence of three indicators of absorbed and unabsorbed slack on the two commonest dimensions of firm performance: profitability and sales growth. Although the relationship between most slack variables and firm performance is curvilinear, the inflection points (for both maximums and minimums) lie mainly outside the distribution range of the slack variables and, consequently, the curvilinear relationships between slack and performance are, in fact, neither U-shaped nor inverted U-shaped. Therefore, the influence of slack on performance can be positive or negative: linear for certain variables, but concave/convex for most variables analyzed in our study. An additional important finding is that the influence of slack on future profitability is usually the opposite of its influence on future sales growth: negative and positive, respectively, for absorbed slack; positive and negative, respectively, for financial slack. Results are robust to different lagged periods of the independent variables. The effects of equity and cash slacks on future performance are mainly negative, especially for longer time periods.
publishDate 2018
dc.date.none.fl_str_mv 2018
2020
2020
2023
2023
dc.type.none.fl_str_mv info:eu-repo/semantics/article
info:eu-repo/semantics/acceptedVersion
format article
status_str acceptedVersion
dc.identifier.none.fl_str_mv http://hdl.handle.net/20.500.14342/1018
https://doi.org/10.1007/s00187-018-0270-4
url http://hdl.handle.net/20.500.14342/1018
https://doi.org/10.1007/s00187-018-0270-4
dc.language.none.fl_str_mv Inglés
language_invalid_str_mv Inglés
dc.relation.none.fl_str_mv Journal of Management Control. Vol.29, n.3-4 (2018), p.361-397
dc.rights.none.fl_str_mv © Springer-Verlag GmbH Germany. Tots els drets reservats
info:eu-repo/semantics/openAccess
rights_invalid_str_mv © Springer-Verlag GmbH Germany. Tots els drets reservats
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv 49 p.
application/pdf
dc.publisher.none.fl_str_mv Springer Verlag
publisher.none.fl_str_mv Springer Verlag
dc.source.none.fl_str_mv RECERCAT (Dipòsit de la Recerca de Catalunya)
reponame:DAU Arxiu Digital de la Universitat Ramon Llull
instname:Universitat Ramon Llull (URL)
instname_str Universitat Ramon Llull (URL)
reponame_str DAU Arxiu Digital de la Universitat Ramon Llull
collection DAU Arxiu Digital de la Universitat Ramon Llull
repository.name.fl_str_mv
repository.mail.fl_str_mv
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score 15.300719

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