Slack resources and firm performance: a meta-analysis

Abstract

Although organizational research posits various relationships between a firm's slack resources and performance, findings to date have been ambiguous. To provide insight into this relationship, this study employed a meta-analysis based on 80 samples from 66 studies ( n=54,249). Results provided evidence of a positive relationship among all three slack types (i.e., available, recoverable, and potential) and financial performance and showed that studies controlling for industry-relative performance demonstrated a stronger positive potential slack–performance relationship than those not including these controls. The analysis also found that studies employing lagged slack measures did not show a stronger positive slack–performance relationship than those employing current year measures for either recoverable or potential slack, a result counter to the one hypothesized. Overall, results highlight the importance of additional research into intervening factors impacting the slack–performance relationship.