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Short-term Expectations in Listed Firms:: The Effects of Different Owner Types
Stockholm University, Faculty of Social Sciences, School of Business, Finance.
Hanken, Finland.
Turku School of Economics, Finland.
2012 (English)Conference paper, Abstract (Refereed)
Abstract [en]

We report empirical evidence regarding the disciplining role of differentinstitutional and other owners in reducing managerial myopia. Using data from alarge Nordic survey, we find that companies to a reasonably high degree feelthat external pressure for a good result in the short-term generates conflictwith the company’s long-term goals. We test for the effect of several ownershiptypes, and find that especially in firms with a large private equity owner theperceived pressure for short-term actions is reduced. In addition, we find anegative association between firm profitability and short-term pressure. Wealso find support for a behavioral characteristic: younger managers feelsignificantly more pressure. Firms subject to higher pressure undertake moreactions to accommodate that pressure. Again, the impact of especially a largeprivate equity owner is beneficial because such firms undertake significantlyless often actions that are likely to destroy value, such as deprioritizingtheir long-term investments or R&D.

Place, publisher, year, edition, pages
National Category
Business Administration
URN: urn:nbn:se:su:diva-90881OAI: diva2:627941
Summer Workshop on Corporate Governance, CBS, August 2012 in Copenhagen
Available from: 2013-06-13 Created: 2013-06-13 Last updated: 2013-07-11Bibliographically approved

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