Essays on the relationship between financial slack and strategic decisions

Abstract

Financial Slack plays a pivotal role in influencing strategic decisions Cyert and March 1963 Penrose 1959 within a firm While the relationship with some strategic decisions like RandD innovation has been widely studied Kim Kim and Lee 2008 Voss Sirdeshmukh andVoss 2008 others like foreign expansion or corporate social performance CSP have been barely touched Margolis and Walsh 2003 Tseng Tansuhaj Hallagan and McCullough 2007 In addition existing research suffers from both theoretical and methodological issues The prominent among them being the treatment of slack as an inefficiency Nohria and Gulati 1996 and lack of robustness checks Shaikh O Brien and Peters 2018 to confirm the curvilinear relationship between slack and strategic decisions newline newline