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Flexibility, Firm-Specific Turbulence and the Performance of the Long-lived Small Firm

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  • Bernadette Power
  • Gavin Reid

Abstract

The hypothesis that flexibility enhances the long run prospects of the small firm is explored by examining precipitating causes of organizational change within it, and consequential adjustments. The study is fieldwork based and uses evidence gathered directly from entrepreneurs. New measures of flexibility and firm-specific turbulence are used to explain long-run performance, measured over 28 distinct attributes. Econometric estimates (using GLS and Heckman selectivity correction) are reported, on the relationship between flexibility, firm-specific turbulence and performance. Firm-specific turbulence is shown to have a negative effect on performance, but the latter is enhanced by increasing the flexibility of the small firm. Copyright Springer 2005

Suggested Citation

  • Bernadette Power & Gavin Reid, 2005. "Flexibility, Firm-Specific Turbulence and the Performance of the Long-lived Small Firm," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 26(4), pages 415-443, June.
    • Handle: RePEc:kap:revind:v:26:y:2005:i:4:p:415-443
    DOI: 10.1007/s11151-005-0224-5
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    1. Bernadette Power & Gavin C. Reid, 2003. "Performance, Firm Size and the Heterogeneity of Competetive Strategy for Long-lived Small Firms: A Simultaneous Equations Approach," CRIEFF Discussion Papers 0307, Centre for Research into Industry, Enterprise, Finance and the Firm.
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    Cited by:

    1. Marco Cucculelli & Lidia Mannarino & Valeria Pupo & Fernanda Ricotta, 2014. "Owner‐Management, Firm Age, and Productivity in Italian Family Firms," Journal of Small Business Management, Taylor & Francis Journals, vol. 52(2), pages 325-343, April.
    2. Tran, Hien Thu, 2019. "Institutional quality and market selection in the transition to market economy," Journal of Business Venturing, Elsevier, vol. 34(5), pages 1-1.
    3. Erin K. Melton, 2017. "Testing Turbulence: Exploring the Determinants of Managerial Networking," Public Organization Review, Springer, vol. 17(1), pages 19-37, March.
    4. Earnhart, Dietrich & Mark Leonard, J., 2016. "Environmental audits and signaling: The role of firm organizational structure," Resource and Energy Economics, Elsevier, vol. 44(C), pages 1-22.
    5. M. A. Arokodare, 2021. "The Moderating Effect of Environmental Turbulence on the Strategic Agility-Performance Relationship: Empirical Evidence from Lagos State, Nigeria," Business and Management Research, Business and Management Research, Sciedu Press, vol. 10(1), pages 1-1, March.
    6. Per Davidsson & Scott R. Gordon, 2016. "Much Ado about Nothing? The Surprising Persistence of Nascent Entrepreneurs through Macroeconomic Crisis," Entrepreneurship Theory and Practice, , vol. 40(4), pages 915-941, July.
    7. Ummad Mazhar, 2021. "Women empowerment and insecurity: firm-level evidence," Business Economics, Palgrave Macmillan;National Association for Business Economics, vol. 56(1), pages 43-53, January.
    8. Marco Cucculelli & Giacinto Micucci, 2009. "The Age Effect of Entrepreneurship: Founder's Tenure, Firm Performance and the Economic Environment," Mo.Fi.R. Working Papers 21, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
    9. Theresa M. Welbourne & Manuela Pardo-del-Val, 2009. "Relational Capital: Strategic Advantage for Small and Medium-Size Enterprises (SMEs) Through Negotiation and Collaboration," Group Decision and Negotiation, Springer, vol. 18(5), pages 483-497, September.
    10. Petrit Gashi & Iraj Hashi & Geoff Pugh, 2014. "Export behaviour of SMEs in transition countries," Small Business Economics, Springer, vol. 42(2), pages 407-435, February.

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