Short-termism

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Video

Prof. Alex Edmans (London Business School) presents his paper on "The long-term consequences of short-term incentives", followed by a discussion of the paper by Mireia Giné (IESE Business School) at the "Corporate Governance And Ownership With Diverse Shareholders" conference at IESE Business School, Barcelona. The full paper and slides from the presentation and discussion can be downloaded here: https://ecgi.global/content/corporate-governance-and-ownership-diverse-s...

17 January 2020

Presentation

We show that following large permanent negative shocks, firms with more short-term institutional investors suffer smaller drops in sales, investment and employment and have better long-term performance than similar firms affected by the shocks. To do so, these firms increase their R&D and advertising expenses, differentiate their products from those of the competitors, conduct more diversifying acquisitions, and have higher executive turnover in the aftermath of the shocks, suggesting that they put stronger effort in adapting their business to the new competitive environment.

July 02 2020

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