Flexibility, Firm-Specific Turbulence and the Performance of the Long-Lived Small Firm

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    33 Citations (Scopus)

    Abstract

    The hypothesis that flexibility enhances the long run prospects of the small firm is explored by examining precipitating causes of organizational change within it, and consequential adjustments. The study is fieldwork based and uses evidence gathered directly from entrepreneurs. New measures of flexibility and firm-specific turbulence are used to explain long-run performance, measured over 28 distinct attributes. Econometric estimates (using GLS and Heckman selectivity correction) are reported, on the relationship between flexibility, firm-specific turbulence and performance. Firm-specific turbulence is shown to have a negative effect on performance, but the latter is enhanced by increasing the flexibility of the small firm.

    Original languageEnglish
    Pages (from-to)415-443
    Number of pages29
    JournalReview of Industrial Organization
    Volume26
    Issue number4
    DOIs
    Publication statusPublished - Jun 2005

    Keywords

    • flexibility
    • firm-specific turbulence
    • performance
    • small firms
    • INDUSTRY STRUCTURE
    • SAMPLE SELECTION
    • REAL OPTIONS
    • BUSINESS
    • STRATEGY
    • MODELS

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