The impact of strategic and financial flexibility on enterprise performance of real estate listed companies in China: the moderating role of environmental uncertainty

The firm’s performance is very significant in ensuring the sustainability of its efforts. It’s a state for organisations to cope with environmental dynamism and continuously provide satisfactory products or services for customers better than competitors. Scholars identified two types of flexibility that are important determinants of firms’ performance, which are strategic flexibility and financial flexibility. Strategic flexibility is one crucial factor that might decide whether a firm succeeds or fails in adapting to dynamic circumstances. Financial flexibility, it is also believed, can improve a company's ability to raise capital more cheaply to fund new development possibilities and improve performance. Despite the importance of these flexibilities, there is a notable gap in current research regarding the relationship between strategic and financial flexibility and firm performance. The effects of strategic and financial flexibility on firm performance have largely been examined in isolation. Current literature lacks a comprehensive model that explores various forms of strategic flexibility (such as coordinating flexibility and resource flexibility) alongside financial flexibility to better understand their combined impact on firm performance. Additionally, the moderating role of environmental uncertainty on the relationship between strategic flexibility, financial flexibility, and firm performance is under- explored. Addressing this gap is essential to extend theoretical insights into how environmental factors influence the flexibility-performance relationship. To fill these gaps, this research proposed a structural model in which strategic flexibility (in terms of resources flexibility and coordinating flexibility) and financial flexibility directly affect firms’ performance, and these relationships are moderated by environmental uncertainty. A survey-based method was used to collect data from Chinese real estate firms that would help to validate the hypothesized relationships. The structural model and the measurement model were assessed to evaluate reliability, validity and to test the goodness of model fit. Smart PLS technique was employed in this research to test the proposed hypotheses. The study found that resource flexibility, coordinating flexibility and financial flexibility are significantly correlated with financial performance and non- financial performance in the real estate firms in China. It also produced strong evidence that environmental uncertainty moderates the relationship between resource flexibility, coordinating flexibility, financial flexibility and financial performance. The results also confirmed that environmental uncertainty moderates the relationship between resource flexibility, coordinating flexibility, financial flexibility and non-financial performance. Despite its limitations, the study achieved all its objectives and suggested theoretical and practical implications of practices. Future research suggestions were offered to broaden the study scope.