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The tortoise and the hare: the impact of employment instability on firm performance
Author(s) -
Ji YongYeon,
Guthrie James P.,
Messersmith Jake G.
Publication year - 2014
Publication title -
human resource management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.44
H-Index - 77
eISSN - 1748-8583
pISSN - 0954-5395
DOI - 10.1111/1748-8583.12052
Subject(s) - instability , gee , sample (material) , economics , quadratic equation , econometrics , demographic economics , generalized estimating equation , mathematics , statistics , mechanics , chromatography , physics , chemistry , geometry
The main objective of this study is to assess the influence of employment instability on firm performance in a sample of publicly traded firms. Competing theoretical arguments are considered with regard to likely outcomes associated with employment instability. A large sample of cross‐sectional time‐series data is then analysed using generalised estimating equations ( GEE ) regression techniques. Results indicate that employment instability is negatively associated with firm performance, although the relationship is also demonstrated to be quadratic (an inverse U ‐shaped relationship). This suggests that the main relationship varies depending upon the level of employment instability. Industry characteristics are also examined as moderators of this main effect. The results suggest a disordinal interaction effect for industry differentiation, where employment instability is negatively associated with firm performance for firms in highly differentiated industries and positively associated in less differentiated industries.