Performance Feedback, Firm Resources, and Strategic Change

Combining insights from the behavioral theory of the firm and the resource-based view we investigate the antecedents of strategic change in fast-changing environments. We hypothesize the independent and joint effects of performance feedback and of flexible and specific resources on strategic change. Using an unbalanced panel of 493 publisher-year observations we find that negative performance feedback triggers more strategic change. Further, while flexible resources have no direct influence on strategic change they weaken the negative relationship between performance feedback and strategic change. Finally, we find that larger stocks of specific resources lead to less strategic change.