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Impact of human resource slacks on firm performance: Evidence from a developing country

Author

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  • M.M. Fonseka

    (Xi’an International Studies University, School of Business, Shaanxi , China)

  • Peng Wang

    (Xi’an International Studies University, School of Business, Shaanxi , China)

  • Muhammad Suhaib Manzoor

    (University of Lahore, Lahore Business School, Pakistan)

Abstract

Purpose of this paper is to investigate whether HR slack leads to improve firm performance, and what is the impact of HR slack in absolute and in relative terms on firm performance in a developing country. It also examines how ownership types moderate the HR slack-performance relationship. The longitudinal data-set of 11,985 firms-year observations from 2000-2009 were used and generalized linear models (GLMs) employed for analyzing data. The findings reveal that (1) absolute HR slack (AHRS) leads to enhance firm performance; (2) AHRS is positively and relative HR slack (RHRS) is negatively affected firm performance; (3) both AHRS and RHRS have inverse U-shaped effects on firm performance. (4) AHRS is positively influenced on performance of both state-owned enterprises (SOEs), and private owned enterprises (POEs). RHRS is negatively affect performance of SOEs. It can be concluded that both absolute and relative HR slacks lead to increase the firm performance up to a certain level, thereafter, firm performance is declined (Curvilinear relationship). The paper is original in its contribution to the organizational slack–firm performance literature by examining the relevance of absolute and relative HR slacks as indispensable sources.

Suggested Citation

  • M.M. Fonseka & Peng Wang & Muhammad Suhaib Manzoor, 2013. "Impact of human resource slacks on firm performance: Evidence from a developing country," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 31(2), pages 279-306.
    • Handle: RePEc:rfe:zbefri:v:31:y:2013:i:2:p:279-306
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    References listed on IDEAS

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    Cited by:

    1. Indarto Pamoengkas, 2020. "Market Orientation and Value Creation in Improving Business Performance of the Fertilizer Industry in Indonesia," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 143-152.

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    More about this item

    Keywords

    human resource slack; firm performance; ownership; China;
    All these keywords.

    JEL classification:

    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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