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Environmental Dynamics, Financial Flexibility and Enterprise Strategic Change

DOI: 10.4236/ajibm.2019.91010, PP. 124-138

Keywords: Environmental Dynamics, Financial Flexibility, Strategic Change

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Abstract:

Enterprise strategic change is affected by the external environment, so the research on the relationship between external environment and strategic change has always been concerned by academic circles. Based on contingency theory and resource-based theory, this paper analyzes the influence of environmental dynamics on the strategic change of manufacturing enterprises, and explores how corporate financial flexibility adjusts the relationship between environmental dynamics and strategic change. Taking the 2011-2017 A-share listed manufacturing companies in Shanghai and Shenzhen stock markets as the research object, the empirical results show that: 1) the environmental dynamism is positively related to strategic change—the more dynamic the environment is, the more the manufacturing enterprise inclined to implement the strategic change; 2) financial flexibility positively regulates the impact of environmental dynamics on strategic change. The high level of financial flexibility means abundant resources for strategic

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