Intertemporal Influence Of Enterprise Slack Resource On The Financial Performance

In the process of business development,there is always an objective problem of idleness or lack of resources.Enterprises are often not in the optimal allocation of resource,thus forming a "slack resource." In the period of economic restructuring,there are a lot of slack resources for Chinese enterprises.For these slack resources,should enterprises hold to combat the risk impact of environmental uncertainty or reduce as much as possible to avoid the waste of resources loss? That leads to a problem that business managers must face and think about.Domestic and foreign scholars have made a great deal of researches on the relationship between slack resources and financial performance.However,more attention is paid to the impact of slack resource on financial performance in the short term,and less attention is paid to how long-term slack resource affects the financial performance.However,the business management of enterprises is continuous and the impact of slack resource on financial performance may also exit in a long-term nature.Slack resource and financial performance both come from the enterprise’s management.The results of financial performance may also affect the allocation of resources in turn.Therefore,when studying the effect of slack resource on financial performance,potential endogenous issues should be considered.To clarify the long-term effects of slack resource on financial performance,the literature both at home and abroad is reviewed firstly,and further the theoretical basis is discussed.Then,theoretical hypotheses are proposed on the cross-period effects of different types of redundant resources on financial performance.China’s A-share listed companies in Shanghai and Shenzhen stock markets for five consecutive years from 2012 to 2016 were selected as empirical samples.Then we constructed two dynamic panel data models on the basis of considering endogenous issues to study the influence between the two.The empirical results show that:(1)The unabsorbed slack resource in the current period had no significant effect on the current financial performance,but had a significant negative impact on the financial performance in the latter year.There is a significant lag in the impact of unabsorbed slack resource on financial performance(2)The current absorbed slack resource had a significant negative impact on the current financial performance,but have a positive effect on the financial performance for the coming two years.Absorbed slack resource has a long-term effect on the financial performance.(3)When considering the nature of corporate property rights,the industry in which it is located,and the listed sector,we find that the cross-period influence of corporate’s slack resource in different property rights,different industries,and different listed segments on financial performance is significantly different.Finally,based on the results of literature research and empirical analysis,this paper puts forward some research enlightenments,hoping that enterprises can make better use of redundant resources and reduce the negative effect on corporate financial performance.This paper explores the intertemporal effects of different types of slack resources on financial performance,and conducts a comparative analysis based on the nature of the property,the industry,and the different sectors listed,which enriches and expands the related research of enterprise slack resources.It is of great practical significance for companies to improve slack resources’ management measures and actively use slack resource from a strategic perspective.