The effects of slack resource of R&D professionals on firm performance: evidence from traditional manufacturing firms in an emerging economy

Abstract

As an important component of organizational human resource slack (HR slack), the slack of research-and-development (R&D) professionals has been studied by several authors. However, it remains unclear whether and how this small component of general HR slack, i.e. the slack of research-and-development professionals (RHR slack), may affect overall firm performance in an emerging economy without much R&D tradition or pro-R&D institutions. Based on two organizational theories, i.e. institutional theory and the resource-based view of the firm (RBV), we propose competing hypotheses on the relationship between RHR slack and firms’ accounting performance. We also examine whether the relationship between RHR slack and firm performance should be linear or curvilinear. Finally, we also test the relationship between RHR slack and other dimensions of firm performance. Several interesting findings have been obtained. For instance, neither the perspective based on institutional theory nor that based on RBV can fully predict all types of RHR slack-performance relationships, be these relationships linear or curvilinear.

Keywords:

• R&D professionals
• human resource
• slack
• void of institutions
• firm performance

Acknowledgement

The authors gratefully acknowledge the support for this research from the National Natural Science Foundation of China (71402098) and Guangdong Department of Education Youth Innovative Talents Projects (2014WQNCX076).

Notes

1. We also tested the reverse causality of firm performance on RHR slack. The results show that all performance indicators do not have a significant effect on RHR slack (p = .292 for Tobin’s Q; p = .756 for ROA; p = .586 for patent application; p = .493 for patent grant). Thus, reverse causality is not a serious issue in this study.