Regulatory Strategies Aimed at Reducing Corporate Short-Termism and Their Effectiveness
Introduction Short-termism is a concern based on the idea that management objectives abandon long-term outlooks in favor of short-term gains based on movements of stock markets that eventually impact the value of companies and negatively affects the economy. There are critics to this view. Some sustain that short horizon are an agency issue. Others state that short-termism is done on purpose, based on what management think is correct on the long-term. Some even argue that…