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Business portfolio reconfiguration and firm performance: The contingency role of organizational capabilities, slack and ownership

Published online by Cambridge University Press:  14 June 2022

Kuo-Liang Chen Open the ORCID record for Kuo-Liang Chen [Opens in a new window] ,
Chung-Jen Chen ,
Jia-Shiuan Hsieh  and
Ya-Hui Lin
Kuo-Liang Chen*
Affiliation:
Department of Business Administration, College of Management, Providence University, 200, Sec. 7, Taiwan Blvd., Shalu Dist., Taichung 433, Taiwan, ROC
Chung-Jen Chen
Affiliation:
Graduate Institute of Business Administration, College of Management, National Taiwan University, 1, Sec. 4, Roosevelt Road, Taipei 106, Taiwan, ROC
Jia-Shiuan Hsieh
Affiliation:
School of Management, State University of New York at Buffalo, 160 Jacobs Management Center, Buffalo, NY14260, USA
Ya-Hui Lin
Affiliation:
Department of International Business, College of Management, Ming Chuan University, 250 Zhong Shan N. Rd., Sec. 5, Taipei 111, Taiwan
*
*Corresponding author. E-mail: klchen12@pu.edu.tw
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Abstract

The purpose of this study aims to explore the relationships between business portfolio reconfiguration and firm performance in developing countries as well as the moderating roles played by organizational slack, capabilities and ownership structure. By using the perspectives of dynamic capabilities, resources-based view and social network, this study proposes that there is a U-shaped relationship between business portfolio reconfiguration and firm performance. Furthermore, while R&D capability, marketing capability and foreign ownership are expected to positively moderate this U-shaped relationship, organizational slack, state and domestic ownership may potentially make this U-shaped relationship less pronounced. We draw our observations from Shanghai and Shenzhen Stock Exchanges in China from 2008 to 2017, and obtain 26,151 firm-year observations, which are consisted of 3,508 publicly traded companies. The results generally support our hypotheses, and some theoretical and practical implications are extracted from this study.

Keywords

Dynamic capability (DC)ownership structurereconfigurationresource-based view (RBV)social network theory
Type
Research Article
Information
Journal of Management & Organization , First View , pp. 1 - 28
Copyright
Copyright © Cambridge University Press and Australian and New Zealand Academy of Management 2022

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