A bird in the hand is better than two in the bush: Investigating the relationship between financial slack and profitability in business groups

IF 3.8 4区 管理学 Q2 BUSINESS Brq-Business Research Quarterly Pub Date : 2021-10-28 DOI:10.1177/23409444211054510
Vivien Lefebvre
{"title":"A bird in the hand is better than two in the bush: Investigating the relationship between financial slack and profitability in business groups","authors":"Vivien Lefebvre","doi":"10.1177/23409444211054510","DOIUrl":null,"url":null,"abstract":"Using arguments from the behavioral theory of the firm, agency theory, and the literature on internal capital markets, this article investigates the relationship between financial slack and firms’ profitability in standalone versus business group–affiliated firms. Using a large sample of French privately held firms, we show that there is a quadratic, inverse U-shape relationship between financial slack and profitability for privately held firms. We observe that the relation is steeper for business group affiliated firms than for standalone firms, which is consistent with the idea that firms in business groups are in competition for the business groups resources. Moreover, we explore whether business groups characteristics and position and weight of a given affiliated firm in the business group organization influence the impact of financial slack on profitability. Our results show that for firms that are closest to the business group head firm and that have a higher weight in the business groups, the quadratic, inverse U-shaped relationship is steeper. These findings suggest that the bargaining power that firms have in business groups plays an important role in explaining the relation between financial slack and profitability. JEL CLASSIFICATION: G32, L22 and L25.","PeriodicalId":46891,"journal":{"name":"Brq-Business Research Quarterly","volume":null,"pages":null},"PeriodicalIF":3.8000,"publicationDate":"2021-10-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"3","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Brq-Business Research Quarterly","FirstCategoryId":"91","ListUrlMain":"https://doi.org/10.1177/23409444211054510","RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"BUSINESS","Score":null,"Total":0}
引用次数: 3

Abstract

Using arguments from the behavioral theory of the firm, agency theory, and the literature on internal capital markets, this article investigates the relationship between financial slack and firms’ profitability in standalone versus business group–affiliated firms. Using a large sample of French privately held firms, we show that there is a quadratic, inverse U-shape relationship between financial slack and profitability for privately held firms. We observe that the relation is steeper for business group affiliated firms than for standalone firms, which is consistent with the idea that firms in business groups are in competition for the business groups resources. Moreover, we explore whether business groups characteristics and position and weight of a given affiliated firm in the business group organization influence the impact of financial slack on profitability. Our results show that for firms that are closest to the business group head firm and that have a higher weight in the business groups, the quadratic, inverse U-shaped relationship is steeper. These findings suggest that the bargaining power that firms have in business groups plays an important role in explaining the relation between financial slack and profitability. JEL CLASSIFICATION: G32, L22 and L25.
查看原文
分享 分享
微信好友 朋友圈 QQ好友 复制链接
本刊更多论文
一鸟在手胜过双鸟在林:调查商业集团财务松弛与盈利能力之间的关系
本文利用企业行为理论、代理理论和内部资本市场文献的论点,研究了独立企业和企业集团附属企业的财务松弛与企业盈利能力之间的关系。利用法国私有企业的大样本,我们表明私有企业的财务松弛和盈利能力之间存在二次型、反u型关系。我们观察到,商业集团附属公司的关系比独立公司更陡峭,这与商业集团内的公司竞争商业集团资源的观点是一致的。此外,我们还探讨了企业集团特征和特定关联公司在企业集团组织中的地位和权重是否会影响财务松弛对盈利能力的影响。我们的研究结果表明,对于最接近业务集团的公司,以及在业务集团中拥有较高权重的公司,二次型,反u型关系更陡峭。这些发现表明,企业在商业集团中的议价能力在解释财务宽松与盈利能力之间的关系方面起着重要作用。JEL分类:G32、L22、L25。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
求助全文
约1分钟内获得全文 去求助
来源期刊
CiteScore
7.50
自引率
6.90%
发文量
14
期刊最新文献
Strategic supplier performance in a competitive landscape: Enhancing organizational performance through lean supply chain management Leading a post-pandemic workforce: Understanding employees’ changing work ethic How to improve quality investing Uncertainty’s impact on adaptive performance in the post-COVID era: The moderating role of perceived leader’s effectiveness Strategy-making: The use and misuse of artifacts to achieve common understanding
×
引用
GB/T 7714-2015
复制
MLA
复制
APA
复制
导出至
BibTeX EndNote RefMan NoteFirst NoteExpress
×
×
提示
您的信息不完整,为了账户安全,请先补充。
现在去补充
×
提示
您因"违规操作"
具体请查看互助需知
我知道了
×
提示
现在去查看 取消
×
提示
确定
0
微信
客服QQ
Book学术公众号 扫码关注我们
反馈
×
意见反馈
请填写您的意见或建议
请填写您的手机或邮箱
已复制链接
已复制链接
快去分享给好友吧!
我知道了
×
扫码分享
扫码分享
Book学术官方微信
Book学术文献互助
Book学术文献互助群
群 号:481959085
Book学术
文献互助 智能选刊 最新文献 互助须知 联系我们:info@booksci.cn
Book学术提供免费学术资源搜索服务,方便国内外学者检索中英文文献。致力于提供最便捷和优质的服务体验。
Copyright © 2023 Book学术 All rights reserved.
ghs 京公网安备 11010802042870号 京ICP备2023020795号-1