Slack Resources and the Performance of Privately Held Firms

2005/08/01 by Gerard George · 124 citations
Business, Management and Accounting · Economics, Econometrics and Finance · Engineering · #Business #Capital Investment and Risk Analysis #Competitive advantage #Computer science #Corporate Finance and Governance #Differential (mechanical device) #Differential effects #Economics #Empirical research #Engineering #Firm Innovation and Growth #Industrial organization #Marketing #Microeconomics #Resource (disambiguation) #Resource-based view

paper · open access · doi:10.5465/amj.2005.17843944

published in Academy of Management Journal 48(4), 661-676 (Academy of Management)

openalex publication_date 2005/08/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/15

Abstract

Empirical findings from publicly traded firms and behavioral 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 enhance performance. Longitudinal data on 900 privately held firms confirm the differing influences 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. The implications of these findings for theories of resources and entrepreneurship are discussed.

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