Swinging a Double-Edged Sword: The Effect of Slack on Entrepreneurial Management and Growth
Posted: 18 Mar 2015
Date Written: May 1, 2011
Abstract
Resource slack represents a double-edged sword, simultaneously fueling and hindering growth. Drawing on Penrose's growth theory and Stevenson's entrepreneurial management theory, we have developed and tested a conceptual model that provides a more nuanced account of the resource slack–growth relationship. Using a large dataset spanning six years, we have found that slack has a positive direct effect on growth but a negative effect on entrepreneurial management, and that entrepreneurial management has a positive effect on growth. Our empirical and conceptual findings are important to the development of firm growth theory and explicate causal mechanisms transforming slack into firm-level outcomes.
Keywords: Entrepreneurial management; Slack; Penrose; Growth; Resources; Mediating relationship; Corporate entrepreneurship
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