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Behind organizational slack and firm performance in China: The moderating roles of ownership and competitive intensity

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Abstract

Extensive studies of the organizational slack–performance relationship offer mixed findings in developed economies while little research attends to transition economies. Replicating and extending earlier work by Tan and Peng (2003), this study examines the relationship between organizational slack and firm performance in China and focuses on the moderating effects of firm ownership and competitive intensity. Empirical findings based on longitudinal data from 60,945 firms during 1998–2002 suggest that the impact of organizational slack on performance is stronger for private enterprises than for SOEs and foreign-invested enterprises. Furthermore, industry competitive intensity positively moderates the effect of organizational slack on performance. In a three-way interaction effect, the moderating effect of competitive intensity on the organizational slack–performance relationship is weaker in SOEs than in private enterprises and foreign invested enterprises.

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Notes

  1. With an ambiguous ownership type, collectively-owned enterprises are nominally owned by local governments, and they often run like POEs and represent the closest organizational form to POEs (Peng et al., 2004).

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Authors and Affiliations

  1. Boeing Institute of International Business, John Cook School of Business, Saint Louis University, 3674 Lindell Boulevard Street, St. Louis, MO, 63108, USA

    Min Ju & Hongxin Zhao

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  1. Min Ju
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  2. Hongxin Zhao
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Correspondence to Min Ju.

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We thank the Editor-in-Chief Mike W. Peng and the two anonymous reviewers for their insightful and constructive comments.

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Ju, M., Zhao, H. Behind organizational slack and firm performance in China: The moderating roles of ownership and competitive intensity. Asia Pac J Manag 26, 701–717 (2009). https://doi.org/10.1007/s10490-009-9148-1

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  • DOI: https://doi.org/10.1007/s10490-009-9148-1

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