Flexibility-efficiency tradeoff and performance implications among Chinese SOEs

Justin Tan and Liang Wang

Journal of Business Research, 2010, vol. 63, issue 4, 356-362

Abstract: This paper examines performance implications of the flexibility-efficiency tradeoff in the turbulent environment. We test the relationship between resource utilization and firm performance among the Chinese state-owned enterprises (SOEs) during China's economic transformation. The study finds that (1) overall efficiency enhances performance; (2) different measures of efficiency all exhibit curvilinear relationship with performance; and (3) differences exist between high efficiency and low efficiency subgroups of firms. The results reveal that efficiency as well as flexibility has a positive impact on firm performance only within a certain range. Beyond a certain point, the cost of maintaining flexibility overwhelms the benefit, causing performance to decline.

Keywords: China; Flexibility-efficiency; tradeoff; Resource-based; view; Dynamic; capabilities; State-owned; enterprises (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:63:y:2010:i:4:p:356-362

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