INFLUENCE OF FINANCIAL SLACK ON THE ECONOMIC PERFORMANCE OF BRAZILIAN FAMILY AND NON-FAMILY COMPANIES

Abstract

The discussion about financial slack and its relation to the economic performance of companies has been the reason for incessant studies in the area of corporate finance since the seminal work developed by Cyert and March in 1963. Therefore, with the purpose of contributing with knowledge about the theme, which still lacks reflections and more deep findings, this research aims to verify the influence of financial slack on the economic performance of Brazilian family and non-family companies. For that, descriptive research with the documentary procedure and a quantitative approach were carried out. The data analyzed were extracted from Thomson Reuters® database and the reference forms published by the organizations on the website of Brazil, Bolsa, Balcão (B3). The period of study is 19 years (1996 to 2014), and the sample is comprised of 137 family companies and 131 non-family companies. The results of the quadratic regressions point out that the influence of slack on performance is non-linear, corroborating with the previous studies that conclude that slack maximizes the performance to a certain level and, later on, it starts to impair corporate performance. In addition, the study reveals that family companies achieve better performance with higher levels of slack than non-family companies, therefore, family and professional managers ought to consider such findings in different ways in order to increase operational efficiency in the specific organizations they manage.