Corporate ownership and managerial short-termism: Results from a Finnish study of management perceptions



: Liljeblom E, Vaihekoski M

Publisher: ELSEVIER SCIENCE BV

: 2009

: International Journal of Production Economics

: INTERNATIONAL JOURNAL OF PRODUCTION ECONOMICS

: INT J PROD ECON

: 117

: 2

: 427

: 438

: 12

: 0925-5273

DOI: https://doi.org/10.1016/j.ijpe.2008.12.008

: http://ideas.repec.org/a/eee/proeco/v117y2009i2p427-438.html


Increased media exposure to layoffs and corporate quarterly financial reporting have created arguable a common perception-especially favored by the media itself-that the companies have been forced to improve their financial performance from quarter to quarter. Academically, the relevant question is whether companies themselves feel that they are exposed to short-term pressure to perform even if it means that they have to compromise company's long-term future. This paper studies this issue using results from a Survey conducted among the 500 largest companies in Finland. The results indicate that companies in general feel moderate short-term pressure, with reasonable dispersion across firms. There seems to be a link between the degree of pressure felt, and the firm's ownership structure, i.e. we find some support for the existence of potentially short-term versus long-term owners. We also find significant ownership related differences, in line with expectations, in how such short-term pressure is reflected in actual decision variables such as the investment criteria used. (C) 2009 Elsevier B.V. All rights reserved.



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