Corporate Ownership and Managerial Short-Termism: Results from a Finnish Study of Management Perceptions

International Journal of Production Economics, Vol. 117, No. 2, 2009

Posted: 20 Feb 2009

See all articles by Eva Liljeblom

Eva Liljeblom

Swedish School of Economics and Business Administration

Mika Vaihekoski

University of Turku, Turku School of Economics; University of Turku - Turku School of Economics

Date Written: February, 20 2009

Abstract

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.

Keywords: Impatience, Short-termism, Investments, Ownership, Finland

JEL Classification: G31, G34, L21, M51, M52

Suggested Citation

Liljeblom, Eva and Vaihekoski, Mika and Vaihekoski, Mika, Corporate Ownership and Managerial Short-Termism: Results from a Finnish Study of Management Perceptions (February, 20 2009). International Journal of Production Economics, Vol. 117, No. 2, 2009, Available at SSRN: https://ssrn.com/abstract=1346892

Eva Liljeblom (Contact Author)

Swedish School of Economics and Business Administration ( email )

P.O. Box 479
FI-00101 Helsinki, 00101
Finland
+358-9-431 33 291 (Phone)
+358-9-431 33 393 (Fax)

Mika Vaihekoski

University of Turku, Turku School of Economics ( email )

Turku School of Economics
Dep. of Accounting and Finance
University of Turku, 20014
Finland
+358 2 33351 (Phone)

HOME PAGE: http://users.utu.fi/moovai/

University of Turku - Turku School of Economics ( email )

Turku, 20014
Finland

HOME PAGE: http://users.utu.fi/moovai/

Do you have negative results from your research you’d like to share?

Paper statistics

Abstract Views
729
PlumX Metrics