Does Short-Termism Influence Firm Innovation? an Examination of S&P 500 Firms, 1990-2003

摘要: The relationship between firm performance and managerial behavior is one of considerable interest to strategy scholars, as evident in the management literature. One particular research stream concerns outcomes arising from capabilities developed through investment tangible intangible assets (e.g., Dierckx Cool, 1989). This intriguing a practical standpoint because it can be fraught with tensions decision-making; on hand, managers are driven invest current resources risky endeavors, such advertising capital expenditures, which may or not yield expected near distant future. On other, they must conserve efforts deliver short-term financial goals for stakeholders who measure value (and ability) by bottom-line results. preceding conundrum has been coined "short-termism" (Laverty, 1996), "corporate myopia" (Feinberg, 1995), "business (Jacobs, 1991), "managerial (Miller, 2002; Stein, 1989), underlying tension decision-making implied that need make investments necessary building long-term competitive advantage often conflicts meet expectations key external constituencies, particularly markets. While topic short-termism received significant attention within popular academic literature, dynamics how pressures drive decisions have less empirical theoretical attention. Indeed, Laverty states "Despite duration prominence this debate, conclusions would guide few far between" (2004: 950). More recent observations concur, Marginson McAulay observing however, there surprisingly little answers questions raised these arguments" (2008: 273). In general, debate reconcile results remains equivocal. paper offers several contributions examining influence market valuations discretionary item central firm's competitiveness, namely development (RD Ito Pucik, 1993; Franko, 1989) well is, turn, influenced characteristics Long Ravenscraft, Hoskisson Johnson, 1992; Hitt, 1988). studies exist markets innovation activities, study differs extends those ways. Past focused unidirectional effects activities valuation Woolridge Snow, 1990). As such, explicitly extent investors geared towards creating value. contrast, examines opposite relationship, specifically whether take into account react indicators their decision-making. Furthermore, while limited confirmed RD Bushee, 1998). complements works directly impact strategic tool management, Grinyer et al. …