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Slack and innovation: Investigating the relationship in Korea

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  • Lee, Sanghoon

Abstract

This study investigates how organizational slack affects innovation by using a panel data set consisting of Korean firms over the 1999–2008 period. Especially, the relationship between financial slack and R&D investment is of concern. We extend previous work on slack and innovation by using dynamic GMM estimation, split-sample method, and other econometric techniques. The empirical analysis shows that the relationship between slack and innovation is weak in Korea, and small firms and young firms create a favorable environment for managers to use slack resources to invest in innovation. The results imply that the relationship between slack and innovation depends on the distinct social and institutional settings in which firms operate and on the organizational characteristics of the firm.

Suggested Citation

  • Lee, Sanghoon, 2015. "Slack and innovation: Investigating the relationship in Korea," Journal of Business Research, Elsevier, vol. 68(9), pages 1895-1905.
    • Handle: RePEc:eee:jbrese:v:68:y:2015:i:9:p:1895-1905
    DOI: 10.1016/j.jbusres.2014.12.009
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    5. Guedes, Maria João & da Conceição Gonçalves, Vítor & Soares, Nuno & Valente, Marieta, 2016. "UK evidence for the determinants of R&D intensity from a panel fsQCA," Journal of Business Research, Elsevier, vol. 69(11), pages 5431-5436.
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    7. Altaf, Nufazil & Shah, Farooq, 2017. "Slack heterogeneity and firm performance: Investigating the relationship in Indian context," Research in International Business and Finance, Elsevier, vol. 42(C), pages 390-403.
    8. Zhang, Yixiang & Zhou, Weiyi & Liu, Meiling, 2022. "Driving factors of enterprise energy-saving and emission reduction behaviors," Energy, Elsevier, vol. 256(C).
    9. Shaista Wasiuzzaman & Ali Uyar & Cemil Kuzey & Abdullah S. Karaman, 2022. "Corporate social responsibility: Is it a matter of slack financial resources or strategy or both?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(6), pages 2444-2466, September.
    10. Shahzad, Ali M. & Mousa, Fariss T. & Sharfman, Mark P., 2016. "The implications of slack heterogeneity for the slack-resources and corporate social performance relationship," Journal of Business Research, Elsevier, vol. 69(12), pages 5964-5971.
    11. Susanne Hügel & Markus Kreutzer, 2019. "The Impact Of Organisational Slack On Innovative Work Behaviour: How Do Top Managers And Employees Differ?," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 24(03), pages 1-44, April.
    12. Tabesh, Pooya & Vera, Dusya & Keller, Robert T., 2019. "Unabsorbed slack resource deployment and exploratory and exploitative innovation: How much does CEO expertise matter?," Journal of Business Research, Elsevier, vol. 94(C), pages 65-80.

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