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A Review And Analysis Of The Effects Of Financial Slack On Firm Innovation, Tony Croix Lewis

Theses and Dissertations

I analyze the effect of financial slack on firm innovation by reviewing prior research and conducting an empirical analysis. The goal of this paper is to describe, refine and expand research on the relationship between financial slack and innovation. I describe how past scholars' conceptualizations and operationalizations of financial slack vary across studies and are often inconsistent with theoretical definitions suggesting that financial slack is a resource that exists in excess of some foreseeable need. My theoretical analysis suggests that one solution to this problem may be to operationalize financial slack as a proportion of total R&D spending (what I …