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The purpose of this study is to investigate the relationship between unexpected financial slack and small- and medium-sized enterprises’ (SMEs) diversification and growth performance.

Using the phenomenon of IPO over-financed in China as the empirical context, the authors constructed a firm-level measure of unexpected financial slack based on over-financed capital resources and extended the nascent inquiry on unexpected slack.

The authors proposed and tested that, with unexpected slack obtained from IPO over-financed, SMEs did not engage in diversification until slack was extraordinarily high (a curvilinear relationship). And in such cases, SMEs preferred geographic diversification rather than industry diversification. Moreover, SMEs were able to sustain growth performance both in the short term and in the long term.

This study had important implications for regulators and managers. The findings of this study suggested that proper regulations on usage of over-financed capital helped SMEs’ sustain their growth performance. Regulatory policies could curb managers from cognitive biases to behave more prudently and deploy the resources more consciously. However, with sufficient resources, managers should also consider more explorative growth drivers such as diversification.

This study joined the efforts of extending the antecedents of slack formation from internal managerial behaviors to external uncertain factors. As the first study to explore the role of unexpected slack at firm level, the results of this study shed more light on the effects of unexpected slack resources.

The purpose of this paper is to examine the influence of ordinary returnee and foreign employees in firm export performance, whose impacts have been overseen in prior research. This study also explores whether returnee and foreign employees function as substitutes or complements, and simultaneously considers the impacts of contextual factors on the relationship between returnee (foreign) employees and firm export performance.

Using panel data of Beijing’s Zhongguancun Science Park manufacturing firms over a seven-year period, from 2009 to 2015, the paper applies panel Tobit regression to deal with the left-censoring dependent variable.

This paper finds the number of returnee and foreign employees has significantly positive influence in promoting firm export performance; however, substitution effects exist between them. In addition, the positive effects of returnee and foreign employees on firm export performance are conditional. For foreign employees, the presence of corporate president with international background and firm imports will weaken their positive impacts. In terms of returnee employees, their positive influence proves not to be significantly reduced by corporate president’s international background but weakened by firm imports.

Previous research only highlights returnee entrepreneurs’ and top managers’ positive influence on firm export performance. However, with the development of emerging countries, for instance, China in this paper, ordinary returnee and foreign employees are playing more and more critical roles in firms’ internationalization process. This paper responds to the practical needs to focus on ordinary returnee and foreign employees.