n South African Journal of Business Management - The interactions between different types of financial and human resource slacks on firm performance : evidence from a developing country

Volume 45, Issue 3
  • ISSN : 2078-5585


This paper investigates the effect of both FS and HR slack together on firm performance and how different levels of these slack resources affect performance of private-owned enterprises (POEs) and state-owned enterprises (SOEs). Hypotheses are tested using a longitudinal data set of 11,985 listed Chinese companies from 2000 to 2009. Findings reveal that the unabsorbed-financial slack and HR slack show an inverse U shape relationship on firm performance for both POEs and SOEs. However, a less-negative interaction occurs for unabsorbed-financial and HR slacks for POEs. The absorbed-financial and HR slacks also shows an inverse U shape relationship on performance and this relationship does not have a significant negative effect on SOE's performance. The article concludes with theoretical contributions and practical implications of the findings.

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