Organizational slack and innovativeness: the moderating role of institutional transition in the Asian financial crisis

Saehwa Hong () and Hyung-Deok Shin ()
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Saehwa Hong: Kutztown University of Pennsylvania
Hyung-Deok Shin: Hongik University

Asian Business & Management, 2021, vol. 20, issue 3, No 3, 370-389

Abstract: Abstract Research has suggested that organizational slack can positively or negatively affect the innovativeness of a firm; however, the point at which such slack has a more salient impact remains unclear. This study adds to the literature by highlighting how the effects of organizational slack may differ depending on institutional environments, a market-oriented or a government-driven institutional environment. We posit an inverted U-shaped relationship between organizational slack and innovati`veness. We further hypothesize that institutional environments moderate this relationship. We find broad support for these arguments in a comprehensive data set representing South Korean manufacturing firms from 1992 to 2009.

Keywords: Organizational slack; Innovativeness; Institutional change (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1057/s41291-019-00094-y

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