In an era of hypercompetition, research and development (R&D) investments are vital for organizations to stay competitive. This microlevel study draws on dynamic managerial capability (DMC) theory to explore the mechanisms contributing to competitive advantages. It posits that DMCs enhance firm performance by increasing R&D spending, and explores the moderating role of slack resources due to their effect on resource availability. Employing hierarchical regression analysis and bootstrapping methods on a longitudinal sample comprising 31 German DAX firms, the findings robustly demonstrate that DMCs facilitate firm performance by fostering R&D expenditures and confirm the moderating effect of specific slack resources. However, only internal but not external slack resources amplify the relationship between DMCs and R&D intensity. Overall, this study emphasizes the critical role of managers’ microlevel capabilities in determining firm performance and sheds light on how different slack resources influence the relationships between DMCs, R&D intensity, and firm performance.

The transformation of state-owned enterprises (SOEs) into efficient entities has been an important approach in transition economies. However, the transition literature reveals little about how control structure affects firm performance of transformed SOEs. Drawing on agency theory, we distinguish three modes of control in transformed SOEs: state-controlled, dispersedly controlled, and privately controlled modes and argue that actual control after transformation plays a critical role in determining performance. Examining the impact of different control modes in China, we find that the key is who controls the transformed firm. Non-state-controlled (dispersedly controlled and privately controlled) firms are more likely to have enhanced post-transformation performance and reduced agency costs than state-controlled firms.