ENGLISH

How Financial Slack Affects Corporate Performance: An Examination in an Uncertain and Resource Scarce Environment

By Bernadette Gral (auth.)

Book information

Publisher
Gabler Verlag
Year
2014
ISBN
978-3-658-04551-7, 978-3-658-04552-4
DOI
10.1007/978-3-658-04552-4
Language
english
Format
PDF
Filesize
1 MB (1078448 bytes)
Series
BestMasters
Edition
1
Pages
116\128
Time added
2014-02-12 18:00:00
Business/Management Sciencegeneral; Entrepreneurship; Accounting/Auditing

Description

Bernadette Gral examines the relationship between financial slack and corporate performance in the European pharmaceutical industry during the financial crisis of 2007 to 2010. Her investigation includes correlational and regression analyses as well as the qualitative content analysis of newspaper articles. The results show that financial slack influences corporate performance measured as ROA based on net income, thus implying that firms use slack resources to enhance performance during crises. The findings support the arguments for a beneficial effect of financial slack on performance according to the resource based view and behavioral theory of the firm.

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