How does the economic policy uncertainty affect the relationship between financial slack and firm performance in emerging countries?

Tournus, Pinar SenerDidin-Sonmez, FatmaAkben-Selcuk, Elif2024-07-182024-07-1820230143-65701099-1468https://doi.org/10.1002/mde.3672https://hdl.handle.net/11411/6942This study investigates the moderating effect of economic policy uncertainty (EPU) on the relationship between slack resources and firm performance in emerging countries. By using 47,523 firm-year observations from seven emerging market economies through the period of 2010-2018, the results show an inverse U-shaped relationship between slack resources and firm performance. The findings also demonstrate that EPU acts as a negative moderator for the slack-performance relationship. In high EPU environments, the marginal benefit from one additional unit of slack is smaller relative to low EPU environments. This study contributes to the slack resources-firm performance literature by emphasizing the role of the broader external environment as a moderator.eninfo:eu-repo/semantics/closedAccessOrganizational SlackAgency CostsResourcesRiskContextLawHow does the economic policy uncertainty affect the relationship between financial slack and firm performance in emerging countries?Article2-s2.0-8513336408810.1002/mde.36721861Q217144Q2WOS:000820512500001