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Moderating Effect of Slack Resources on the Charitable Giving and Firm Performance Nexus

Author

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  • Tan, Siow-Hooi

    (Faculty of Management Multimedia University Persiaran Multimedia 63100 Cyberjaya Selangor MALAYSIA)

  • Habibullah, Muzafar

    (Institute of Agricultural and Food Policy Studies Universiti Putra Malaysia 43400 UPM Serdang Selangor MALAYSIA Putra Business School 43400 UPM Serdang Selangor MALAYSIA)

  • Ong, Hway-Boon

    (Faculty of Management Multimedia University Persiaran Multimedia 63100 Cyberjaya Selangor MALAYSIA)

  • Mohamed, Azali

    (Faculty of Economics and Management Universiti Putra Malaysia 43400 UPM Serdang Selangor MALAYSIA)

Abstract

This study aims to examine the relationship between charitable giving (CG) and firm performance (FP) of tourismrelated firms across various economic regions. Panel data on tourism-related firms covering the years 2002 to 2014 are utilised. Results generating from the system-GMM estimator reveals an inverse U-shaped relationship between CG and FP. This curvilinear relationship suggests that though CG enhances FP, it does not imply an unlimited increased in charitable giving. Beyond a certain limit, firm performance will deteriorate. Furthermore, the empirical results also suggest that a firm’s slack resources play a vital role in strengthening the CG-FP relationship. This finding implies that firms with higher flexibility of slack resources may allocate their slack resources in relation to CG to improve their financial performance and subsequently remain competitive in the industry.

Suggested Citation

  • Tan, Siow-Hooi & Habibullah, Muzafar & Ong, Hway-Boon & Mohamed, Azali, 2019. "Moderating Effect of Slack Resources on the Charitable Giving and Firm Performance Nexus," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 53(3), pages 129-139.
    • Handle: RePEc:ukm:jlekon:v:53:y:2019:i:3:p:129-139
    DOI: http://dx.doi.org/10.17576/JEM-2019-5303-10
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